Family Legacy Planning Series

Ed Copley & My Journey from Fear to Friend

March 28, 2023

I’ve written recently about my journey to create and grow The Blum Firm. As with most endeavors, the path from then to now wasn’t a straight upward sloping line. Especially in the early years, it was more of a roller coaster, replete with mistakes (aka “teachable moments”) and a lot of self-discovery. I’d like to share how one such early “mistake,” seasoned by the passage of time and my corresponding maturity, grew into one of my greatest blessings.

In the summer of 1976, after my first year of law school, I worked in the tax department of Price Waterhouse, and the experience was a perfect match for me. The following summer, I decided to intern at two law firms—one in Fort Worth and one in Dallas—to learn more about a law firm career path. As a Fort Worth boy, my hometown law firm was an easy fit. On the other side of the Trinity River, the Dallas law firm experience was a challenge for me—bigger, faster, and more high-octane. Was it also a fit? Not so much.

The head of the tax department at the Dallas firm was a brilliant, hard-working, and hard-charging man with massive responsibilities on his shoulders. I admired him but was too intimidated to try to forge a connection with him. Once I decided that firm wasn’t the place for me, I made no effort to build a relationship with him. Given how that clerkship went, I assumed he had no interest in me either. I also assumed I’d likely never have contact with him again. His name: Ed Copley.

For decades, that name struck fear in me, conjuring up negative memories of that clerkship experience. As decades unfolded and my Fort Worth law practice grew, it turns out that Ed Copley and I indeed reconnected. He was representing a matriarch in a complicated estate planning transaction that required her children to hire their own lawyer. Lo and behold, the children hired The Blum Firm, arousing fear in me that my relationship with Ed Copley would be tense.

To my surprise and relief, my interaction with Ed was the opposite. He was collegial and welcoming of my input. He treated me, many years his junior, with respect. My fear of Ed Copley melted away.

The story gets better. As The Blum Firm grew, we opened a Dallas office which quickly became vibrant. Our Dallas staff included a senior attorney, Kent McMahan, who had just retired as head of the Trust & Estate department at Fulbright & Jaworski. Still robust, Kent continued his career at The Blum Firm, serving as a powerful mentor to our team. Sadly, Kent passed away, leaving a vacancy I wanted to fill with another senior attorney. Guess who I called to recruit? You got it—Ed Copley!

For the last seven years, Ed has been Senior Counsel at The Blum Firm, bringing extraordinary wisdom, intellect, and kindness to our firm every day. Ed is the consummate role model. We all look up to him and learn from him. Most of all, I regard Ed as a close friend, and our relationship is one of the greatest blessings in my career.

If someone had told me in 1978 that one day Ed Copley would be working at a law firm with my name on the door, I’d have never believed it. What a difference 40 years can make! It still blows my mind, and it teaches me so many lessons. First is to fight off our fears and intimidations and be open to connecting with people in positions of power. They don’t bite, and we can learn so much from them. I now realize the problem wasn’t Ed; it was me. Second is to believe that feelings can change. We evolve and heal, if we will just be patient and have faith. And finally, every “failure” is a learning experience and opportunity to grow. I look back now on that “Big Law” clerkship where I wasn’t a fit and am grateful it helped inform me how to chart a career path and build a law firm (and law firm culture) of my dreams.

To my dear friend Ed, thank you for not giving up on me and for teaching me so much.

Marvin E. Blum

Life Insurance May Be Your Family’s Ideal Solution

March 21, 2023

Let me clarify at the outset that I don’t sell life insurance. However, The Blum Firm is a big fan of life insurance as a solution to many estate planning challenges. In my speech this month to the Dallas Estate Planning Council, I described seven situations where life insurance came to the rescue (click on this link for my presentation on “Life Insurance Planning Opportunities”).

I started my speech by mentioning that I’m about to attend the 45th reunion of UT Law School’s class of 1978. I reflected on the estate planning world of 1978 compared to estate planning in 2023. If an estate planner from 1978 came back to hear my speech, he would hear a whole new vocabulary and wonder, “What is this foreign language Marvin’s using?” SLATs, Blended Families, Loan-Regime Split Dollar, Mixing Bowl Partnerships, PPLI, Life Settlements, FAST Trusts—none of those were part of estate planning parlance when I started my law practice 45 years ago. Their heads would be spinning.

In this new world of estate planning, planners think “outside the box” to derive creative solutions to address our clients’ needs. Many of those solutions involve life insurance. Here’s an overview of the topics I covered:

• Each spouse’s SLAT (Spousal Lifetime Access Trust) may buy life insurance on the other spouse to replace assets in the deceased spouse’s SLAT that will benefit the children at the first death.
• If you love your grandchildren equally, consider a life insurance policy that passes equally to your grandkids, per capita rather than per stirpes.
• For today’s “Blended Family,” I identified five situations where life insurance can help preserve family harmony.
• Loan-regime split dollar life insurance can help you “have your cake and eat it too,” removing assets from the estate but preserving a stepped-up basis at death.
• Using a “Mixing Bowl Partnership” can enable you to shift basis from one asset to another, allowing you use an appreciated asset to buy PPLI (Private Placement Life Insurance) without incurring tax on the gain.
• Before cancelling a policy, consider selling it in a Life Settlement, often for far more than the policy’s cash value.
• Create a FAST (Family Advancement Sustainability Trust) funded with life insurance to pay for family retreats, family travel, maintenance of legacy real estate assets, and overall family enrichment after G-1 is gone.

I closed by urging estate planners to address these topics with our clients. Not only will it help our clients and their families achieve their goals, it will also help show our clients that we truly care about them. I concluded by quoting Teddy Roosevelt: “People don’t care how much you know, until they know how much you care.”

Marvin E. Blum

White Belt: Mind; Black Belt: Heart—The Martial Arts of Estate Planning

March 14, 2023

No where is the struggle of listening to your heart versus your head more potent than when engaging in estate planning. When designing an inheritance, my clients are often torn between doing what their head tells them when their heart is pulling in the other direction. I submit that in estate planning, it’s not an “either/or” (head or heart) but a “both.” And for the sake of multi-generational success, the heart is the more dominant force.

This message became clear to me on a recent trip with my wife Laurie to Lake Austin Spa to celebrate our 44th wedding anniversary. For those who know me, it comes as no surprise that I spend such spa getaways going from one fitness class to another, driven to make every minute productive. (I’m not resting on vacations; as my mother-in-law often said: “I’ll rest when I die.”) As the photo reveals, one such class was Tai Chi, taught by fitness guru David Robbins.

Tai Chi, like other Eastern disciplines, is a mix of body, mind, and spirit. At the end of the session, Robbins challenged us to interpret the phrase “White Belt: Mind; Black Belt: Heart.” I’m no karate kid, but I figured out that in the struggle between the two, the heart takes precedence over the mind. In the world of martial arts, a white belt is a beginner while a black belt represents skill, strength, and experience. A mature person puts his full heart into every effort. While your mind is an important part of the process, to achieve a successful outcome requires a heavy dose of heart.

What does this have to do with estate planning? In my 45-year law journey, I spent my beginning white belt years focused on the “head” side of planning. My primary attention was on the technical and tax aspects of estate planning. As I’ve ventured on toward the goal of becoming a black belt estate planning lawyer, I figured out the critical importance of the “heart” side of planning. It takes both—head and heart.

Numerous wake-up calls lead me to this place: inheritances gone bad, sibling warfare, and unprepared heirs. I repeatedly hear my TIGER21 colleagues say what keeps them awake at night isn’t money or investments, but it’s family matters. Experiencing life cycle events like my brother’s death and the births of my five grandkids awakened me to the role of estate planning in creating a lasting legacy. I took a deep dive into the waters of “FAST” trusts, family meetings, family governance, and preserving a heritage. I understand the need to be intentional about achieving multi-generational connectedness (“interdependence”). It takes more than “hope” for a family to remain strong over the years. Hope is not a strategy.

In my search for a label for this type of estate planning, I’ve considered many options: Family Legacy Planning, Qualitative Estate Planning, Holistic Estate Planning, the Soft Side of Estate Planning, Family Governance Planning, and Family-Centered Planning, but the one I keep coming back to is “Head & Heart” Estate Planning. My Tai Chi class makes me think that label may sum it up the best.

The Blum Firm welcomes the opportunity to assist with both the “head” and the “heart” aspects of your estate planning.

Marvin E. Blum

Planning for the Other “Baby” You Raised—Your Family Business

March 7, 2023

I was recently honored to deliver the keynote address for a symposium sponsored by the Purposeful Planning Institute. The topic was the one I frequently describe as “the most neglected area of estate planning:” Business Succession Planning. Click here for a copy of my PowerPoint.

In the realm of “head and heart” estate planning, transitioning a family business draws heavily from both the head and the heart. All business transfers present challenges for a founder, whether the transfer is to family members, insiders/employees, or outside third parties, but the sale to third parties tends to be most challenging. Indeed, unless we pay sufficient attention to the owner’s personal transition, the transaction almost always fails. Here are three examples where The Blum Firm successfully shepherded the process of selling a business through to closing.

• Founder and his wife observed that they had done their job educating their children and setting them up in good careers. Ready to retire, charitably inclined, and seeking a steady lifetime stream of income, they transferred their business to a Charitable Remainder Trust (“CRT”). (Note that there are special income tax considerations that apply when transferring a business to a CRT.) The CRT sold the company, deferring income tax on the sale. The tax was paid gradually over the years as the CRT made annual payments to the couple (and later, after the husband died, to the surviving wife). In addition to financial peace of mind, the couple enjoyed knowing that their favorite causes would benefit when the remaining trust funds pass at the survivor’s death to a Donor Advised Fund.
• The owners of a legacy family business received an unsolicited offer for considerably more than they thought the company was worth. Resisting the temptation to give a quick “yes,” they hired a broker to take the business to market. Four more suitors surfaced and engaged in a bidding war. They ultimately sold to a strategic buyer who paid four times the original offer, in cash. Each child owned some shares and received a generous payout. The bulk of the proceeds went to the parents, who then created a Family Foundation which they enjoy operating. Since the children each have their own wealth, the parents are leaving their estate to the Family Foundation.
• The self-made creator of a major enterprise was eager to monetize the value of his business and lighten the burden of being the sole “captain of the ship.” He declined multiple offers from private equity firms for fear they might burden the business with debt and lay off employees (whom he considered like family). Instead, he sold the business to a major conglomerate, getting the value out of the company but under an arrangement where he could stay on and run it for as long as he wishes. Also charitably minded, the founder and his wife are donating a substantial portion of their wealth to a Family Foundation.

These three transactions addressed the founder’s head needs as well as heart needs, thereby making it to the finish line with a successful closing. Estate planning advisors are uniquely positioned to help business owners address both the quantitative (head) and qualitative (heart) aspects of business succession planning. I applaud the work of the Purposeful Planning Institute for training advisors to deal with both aspects—in their words, “to fuse the technical aspects of Estate Planning and Wealth Management with relational and legacy planning.” I was honored to be on the PPI Symposium faculty and serve as a champion for the cause.

Marvin E. Blum

Be Spontaneous and Make a Memory!

February 28, 2023

I’m an estate planning lawyer who urges people to be careful planners. In my own life, I’m a cobbler who wears my own shoes. I try to plan every detail and contingency in my life. On top of that, I’m extremely practical. That’s me—pretty much a boring, practical planner. (At least I’m self-aware.) I don’t do spontaneous.

So picture this scene. Last Thursday night, after a full week of travel, work, and events every evening, I was desperate for a weekend to recharge. A text arrives. It’s my New York daughter Lizzy, who just scored two Saturday tickets to “Funny Girl,” a perfect father-daughter outing. My immediate response: “I can’t do that. It’s too last minute.” Lizzy wasn’t accepting that. Her reply: “YOLO.” I figured it out—You Only Live Once. My wife Laurie added: “One day, you won’t be able to travel. Do it while you can. Also, you’d drop everything for something bad, so why not drop everything for something good?” Minutes later, I’m booking a 24-hour trip to New York.

I’m writing this post on the flight home, tired but grateful that I broke out of my practical planner mold. Last night with Lizzy was a mountaintop moment we’ll both cherish forever. The show was terrific, but more than that, we made a lifetime memory. Lizzy and I share a lot of the same wiring. The highs and lows of Fanny Brice’s journey as an entertainer resonated with both of us. We felt that joy and pain deeply, and it was even richer because we felt it together.

I had almost backed out. Lizzy discovered that the title role was being performed by an understudy. After a brief internal debate, I proceeded with the trip and figured if it’s not performed by Barbara Streisand, what’s the difference if it’s Lea Michele or someone else? Good decision. The understudy was brilliant.

The last time I did something spontaneous was 12 years ago. Leaving an event, friends invited Laurie and me to join them for five days on a yacht—leaving the very next morning! Again, the practical planner in me instantly declined. Then Laurie set me straight. I reversed my decision, and we had the best getaway ever. I’m grateful to have a wife and daughter who challenge me when my brain is yelling “this makes no sense.” Sometimes we should get out of our comfort zone and do things that make no sense to us. The reward is worth it.

At this point in my life, my top two priorities are relationships and memorable moments. Being practical almost deprived me of a chance to check both those boxes. I suppose a little spontaneity looks good on me, maybe once every dozen or so years.

I’ll close with this wisdom, which sums up my night with Lizzy (sing along with me): “People, people who need people, are the luckiest people in the world.” Indeed, I am.

Marvin E. Blum

Putting a Big Red Bow on Your Estate Plan

February 21, 2023

I spent Valentine’s Day in Midland, Texas, talking about putting a big red (Valentine-worthy) bow on top of your estate planning package. After signing the package of estate planning documents, our work is not complete until we add the bow on top. The red bow is a “Red File,” a collection of information your family needs to know that is not in your estate planning documents. Click here for a copy of my presentation.

We have described the Red File in a previous post (see “Create a ‘Red File’ to Prepare Your Heirs for What’s Coming”), but the topic is so important it merits covering again today. A Red File provides your family with a roadmap to guide them in four key areas:

• Your care during incapacity
• Estate administration upon your death
• Succession planning for your business
• Creating a lasting legacy

It includes items such as key contacts, passwords, caregiving wishes, and heartfelt reflections.

A Will tells who inherits your assets, but it doesn’t tell what you own or where those assets are located. Handing an executor a Will without more information is like telling them where to drive your car but not telling them where the keys are.

Like most estate planning tasks, it’s tempting to postpone creating a Red File until “later.” However, playing the waiting game is risky. Once dementia sets in or a traumatic brain injury occurs, it’s too late. Furthermore, death often comes without advance warning. The leading cause of death in the U.S. is heart disease. For two-thirds of women and half of men, their first symptom was death—not chest pain, not discomfort in an arm, not shortness of breath.

Given the uncertainties, I urge all to complete our Red File checklist. This guide is forever a work-in-progress. If you think of items we should add, please forward your ideas to us. We welcome your input to continue improving this valuable roadmap for your loved ones.

Marvin E. Blum

It Takes a Team – and I’m Mighty Proud of Ours

February 14, 2023

In a recent post I told the story of my journey to create and build The Blum Firm, learning from mistakes along the way (see “When Failure Happens, Send a Thank You Note”). I shared my efforts to create a caring culture, partnering with like-minded colleagues driven to provide first-class estate planning to our clients.

Today I’d like to share an experience from eight years ago that affirmed my efforts were bearing fruit. I received a call out of the blue from the CFO of a family office, engaging in a nationwide search for new estate planning counsel. Months later, the CFO called back to say that after an extensive search, The Blum Firm emerged in first place. Honored and humbled, I wanted to learn more about who we were through their eyes. Why us? The response:

• The top credentials of our attorneys.
• The creative “outside the box” planning we provide.
• The size of our team, as a deeper bench would enable us to staff multiple projects simultaneously.
• The younger age of most of our attorneys—more likely to be here to assist G-3 and G-4 in years to come.
• Our reputation for quality work and service.

We’ve now represented this family for eight years, and I’m gratified they often serve as a reference for us. In describing The Blum Firm to others, they add another element to the list—the caring service and responsiveness of our team.

In today’s post, I want to pay tribute to The Blum Firm’s amazing staff. In addition to assembling dedicated attorneys, we take equal effort to hire the best and brightest for the other half of our law firm family. Our paralegals, legal assistants, and all the other members of our support team repeatedly go above and beyond to help us achieve our mission: caring for our clients and each other, collaborating with other advisors and among ourselves, and creating a community of character and talent. Each takes pride in bringing his or her best to work every day. And there’s no ego—we just want the best solutions for our clients.

I’ve seen this commitment in action day after day. Winding the clock back to 2000 when a tornado destroyed our office, our team engaged in the two-year herculean task of sorting through hundreds of boxes of mixed-up papers laden with razor-sharp glass shards to put our clients’ files back together. We’ve been there for client emergencies, literally 24/7, to provide urgent documents and, even more importantly, peace of mind. Hospital visits, home visits, funerals, literally and figuratively handholding for recently widowed spouses—there’s a can-do spirit and a positive attitude. We’re here for you, and we care.

The Blum Firm work community is truly a family. On this Valentine’s Day, I’m sending love to this extraordinary team.

Marvin E. Blum

You Can’t Take Your Leftovers with You—So How Much Do You Leave to Your Kids?

February 7, 2023

My 10-year-old granddaughter Stella Savetsky posts a weekly Instagram video, Stella’s Torah Corner, teaching that week’s Torah portion. I always learn a lot from her posts, including her most recent one on the portion Beshalach. After escaping slavery in Egypt, Jews wandering in the desert received daily manna from heaven to sustain them. Whatever manna they didn’t finish at the end of the day was destroyed. They couldn’t take the leftovers with them. Stella wisely provided a Torah lesson that resonates with her estate planning Zaidy: when you die, you can’t take your leftovers with you. Accordingly, you need to plan carefully for where those leftovers should go upon your death. Guiding people in that important decision just happens to be my life’s work.

When parents consider where to leave their “leftover” assets, the knee-jerk reaction is to leave them to their kids. However, after careful analysis, the decision is actually more complicated. How much is the right amount to leave your kids? Returning to the article featured in a couple of my recent posts “The Getty Family’s Trust Issues” (The New Yorker, Jan. 23, 2023), Evan Osnos declares: “The question of how much to leave your kids has been with us since the Ice Age…. [W]hen inheritance patterns reach extremes, they wreak social and political havoc.” All are familiar with stories of inheritances gone bad. Osnos cites two famous examples: “Even some of America’s greatest entrepreneurs saw inheritances as a handicap—a ‘misguided affection,’ as Andrew Carnegie put it. William K. Vanderbilt, a descendant of Cornelius, observed, evidently from experience, that inherited wealth was ‘as certain a death to ambition as cocaine is to morality.’”

What’s the answer? Warren Buffett’s famous advice is “enough so they can do anything, but not so much that they can do nothing.” My position is that the right amount of inheritance is the amount your heirs are prepared to receive. Any amount is too much if it lands in unprepared hands. Having witnessed all too often the disastrous consequences of money going to the unprepared, I embarked on a Family Legacy Planning initiative to encourage families to engage in a thoughtful family meeting process to equip future generations with the skills (financial and emotional) to handle whatever amount is coming their way.

Parents often joke with me that they plan to spend their last dollar on the day they die. Obviously, that only works if you have a crystal ball telling you that date. The reality is that, in the end, there will be “leftovers” to distribute. Here’s my suggestion for a three-part inheritance to leave your heirs:

• A portion as a traditional inheritance passing to a trust that provides for the health, education, maintenance, and support of your heirs, protected from creditors and divorces;
• A portion to a charitable vehicle, such as a private foundation or donor advised fund, giving your heirs a second inheritance they can use to benefit causes important to the family; and
• A portion to a FAST Trust (Family Advancement Sustainability Trust) where funds are not to be distributed to beneficiaries but are to be spent only on family enrichment activities such as family retreats, family travel, preserving a heritage, maintaining a legacy property, and providing programs to educate the family on philanthropy, entrepreneurship, and other worthwhile endeavors.

As you ponder where to allocate your leftovers at death, I urge you to work with advisors to guide you through a thoughtful process. The goal is to design an estate plan that improves the odds of multi-generational success, passing assets down to responsible, empowered (and not entitled) heirs.

Marvin E. Blum

Pay Attention to the Signs

January 31, 2023

Last week’s post explored themes covered by The New Yorker magazine’s article “The Getty Family’s Trust Issues” (Jan. 23, 2023). In writing the article, author Evan Osnos interviewed me for my views on current trends in estate planning. There’s a lot happening in the world of trusts, estates, and tax planning.

For over three decades, we have been living in the “Golden Age” of estate planning. As Osnos quoted me in the Getty article: “‘Conditions for leaving large sums have never been better,’ noting that ‘Congress has not closed an estate-planning loophole in over thirty years.’” However, in the world of my wise friend Mary Staudt, it’s time to “pay attention to the signs.”

Until recently, the estate planner’s tools in our golden toolbox were by and large flying under the radar. Then came 2021. As the pendulum started swinging from Trump-right to Biden-left, writers like Osnos began exposing our tools to the general public. Multiple articles in mainstream media began igniting a public outcry to “Tax the Rich,” as displayed in the photo of Rep. Alexandria Ocasio-Cortez’s met gala gown. Senator Bernie Sanders cleverly labeled his legislation “For the 99.8% Act,” asserting that the tax increases would only hurt 0.2% and would help 99.8%. Senator Elizabeth Warren touted her “Billionaire’s Tax,” which actually applied to anyone with a net worth of $100 million, but the “billionaire” label was more bombastic. Provisions such as these came within two votes of becoming law.

Political turbulence and anti-rich public sentiment are sending a warning call that one of these days “a change is gonna come” (to quote Sam Cooke). With that backdrop, here’s my take on current trends in estate planning.

1. Take advantage of “squeeze & freeze” tools to reduce estate tax while the opportunity exists. Those who complete planning before a law change will likely be grandfathered.
2. Engage in “Use It or Lose It” planning to lock in the $12,920,000 estate tax exemption before it cuts in half at the stroke of midnight on December 31, 2025 (when Cinderella’s coach turns back into a pumpkin).
3. Rising interest rates create a push to do a long-term lock-in of today’s low interest rates on intra-family loans but also make certain tools more attractive (such as Charitable Remainder Trusts and Qualified Personal Residence Trusts).
4. Inflation and the rising cost of living are motivating parents and grandparents to do more to help kids financially now, when they need it, as opposed to waiting until later to inherit. Ways to help include low-interest loans (such as home mortgages), annual $17,000 gifts, medical/education payments, Section 529 Plans, and gifts to Defective Grantor Trusts.
5. The economic downturn actually creates the ideal timing to do estate freeze planning such as 678 Trusts, SLATs, and DGTs. Resist the psychological urge to wait on planning until values recover, as pre-recovery planning beats post-recovery planning.
6. As a premier advocate for both “head” and “heart” estate planning, I note that the pandemic has stimulated a trend to engage in Family Legacy Planning. We became more aware of our mortality, prompting introspection: “To what end have I created this wealth?” Sheltering at home made it more difficult to sweep family dynamics/dysfunction under the rug, encouraging facilitated family meetings aimed at improving communication and trust.

While these trends are on the rise, many still fall victim to the greatest obstacle in estate planning—procrastination. I urge all to recognize that time is flying by, and with all the signs that “change is a-coming,” the passage of time is not our friend.

Marvin E. Blum

Lessons from the Getty Family Estate Plan

January 24, 2023

In this week’s issue of The New Yorker magazine, Evan Osnos’ article “The Getty Family’s Trust Issues” contains a lot of important messages about Family Legacy Planning. Although the premise of the article is to explore how oil tycoon J. Paul Getty’s heirs have successfully avoided paying millions of dollars of tax, there is a lot to learn from the Getty family story beyond how they managed to save tax. As he was writing the article, Osnos contacted me to discuss not only Getty-type tax saving tools, but broader trends in estate planning. I was honored to provide input for the article about the planning opportunities in the “Golden Age” of estate planning but cautioned that the Golden Age likely won’t last forever.

First, let’s address some of the tools. Osnos points out that J. Paul Getty, America’s richest person, avoided estate tax on his art, property, and land by bequeathing them to a museum trust that established The Getty Center, one of the most visited of all America’s art museums. Paul’s son Gordon Getty, a San Francisco philanthropist, left four sons from wife Ann plus three daughters from an extramarital affair. Gordon included his three daughters in his estate plan by creating a trust for them called the Pleiades Trust, named for a group of Greek mythology sisters who had affairs with Olympian gods and were rewarded by becoming stars in the sky. Much of Osnos’ article is devoted to lengths taken by the Getty family to save tax, specifically by domiciling the trust in Nevada in order to escape California state income tax on the trust income. The trust tax arrangement is exposed by the Gettys’ disgruntled wealth manager Marlena Sonn.

Osnos also references other favorite techniques in the estate planner’s playbook, notably SLATs, CRUTs, BDITs, and GRATs. He shares that the Gettys share the usage of such tools with other mega-wealthy families such as heirs of Walmart founder Sam Walton and casino owner Sheldon Adelson. Other dynastic families also receive shout-outs for their efforts to utilize such tools, including owners of Gallo wine, Campbell’s soup, Wrigley gum, Family Dollar, Public Storage, and Hot Pockets. Osnos also highlights the strategy of holding appreciated assets until death and getting a stepped-up basis, pointing out that Jeff Bezos would avoid tax on a hundred billion dollars of Amazon stock gains if he died tomorrow. To pay living expenses without having to sell the stock during life, many owners of appreciated stock borrow against the stock and live off the loan proceeds, holding the stock till death (described as “buy, borrow, die”).

The important point I want to make is that these techniques are perfectly legal. Osnos draws a distinction between tax avoidance (such as through use of these tools, which is legal) and tax evasion (such as failing to report income or overstating deductions, which is illegal). However, articles like this one and others are shining a light on many of the tools that in prior decades were flying under the radar. Most notably, “For the 99.8%” tax legislation proposed by Senator Bernie Sanders in 2021 aimed to kill a number of these tools but would grandfather anyone who had used them prior to the law’s passage. The law didn’t pass, but the publicity around it stirred up a public sentiment to “Tax the Rich,” as Rep. Alexandria Ocasio-Cortez’s met gala gown proclaimed in huge red letters. As I pointed out in Osnos’ article, “Now that the general public is aware, there is a growing outcry to shut down these benefits. This is a wake-up call that, sooner or later, the tax landscape will likely drastically change.” Those who wish to take advantage of the current opportunities would be wise to act now.

There is more to Osnos’ story about the Getty family than tax avoidance. He also describes competing philosophies among the heirs regarding the purpose of the family wealth. There are different views on where to invest and what causes to support. Dysfunction in the Getty family abounds. Old Paul had five divorces and five sons, whose weddings he didn’t even attend. After his death, the family feud was played out in public view in the courthouse, leading to a forced sale of Getty Oil to Texaco. One of Gordon’s daughters, a beneficiary of the Pleiades Trust, laments that her “abrupt transformation into an heir gave her little preparation for managing a fortune. ‘In exchange for the love I didn’t receive in my life, I got money,’ she said. ‘So, at first, I always felt misery and guilt, and I didn’t know what to do with it.’”

The Getty story is an extreme case of what drives my passion for “head and heart” estate planning. In conjunction with expanding someone’s inheritance through creative tax planning, the estate planning process must also prepare the heirs to be responsible inheritors. Over the last two years, my Family Legacy Planning series has focused on best practices to prepare heirs and bring a family together: family meetings, family governance structure, family mission statement, educating heirs, preserving family history and traditions, business succession planning, writing a legacy letter, family travel—the list goes on and on. Just like the Getty heirs, family members won’t always see eye-to-eye. Communication styles and love languages will differ. But a successful family addresses these matters rather than sweeping them under a rug. The end result is improved communication and trust, as well as family interdependence, so a family is there for each other as a support team when needed.

In my conversation with Evan Osnos, we took a deeper dive into current trends in estate planning. The conversation was stimulated by the Getty story, but my thoughts took off from there. In next week’s post, I’ll highlight more of the modern trends in estate planning that emerged from my involvement with the Getty article in The New Yorker. (The article is available here and here.)

Marvin E. Blum

Should I Sell My Business to a Private Equity Firm?

January 17, 2023

When it comes to selling a business, some opt to sell 100% to a third-party buyer and completely walk away. However, others find it more appealing to “take some money off the table” but keep a stake in the business, keep management intact, and share in future growth. Before rushing to accept an offer, seek professional advice to help you find the business buy-out solution that best fits your family.

In “Private-Equity Firms Eye Family Businesses” (Wall Street Journal, Sept. 19, 2022), Miriam Gottfried explores the world of private equity business acquisitions. A private equity firm is a firm owned by investors who pool their money to buy businesses. Initially known for billion dollar deals to take big public companies private, private equity firms are now shifting focus to smaller family businesses. Very commonly, the bulk of the family’s net worth is tied up in the business. Such private equity deals offer owners another exit option when they wish to diversify their wealth.

Gottfried tells the story of the Lang family, owners of an 80-year-old pet food business, Ainsworth Pet Nutrition. Partnering with celebrity chef Rachael Ray, the firm was poised to take their brand to the mass market. The private equity firm L Catterton, recognizing the country’s growing obsession with pets, spotted an opportunity.

Rather than selling 100%, the Langs sold 42% but parted with control over operations. Under L Catterton’s management, the business expanded its product line and acquired one of the manufacturers of their merchandise. Fast-forward four years and J.M. Smucker Co. bought Ainsworth for $1.9 billion, earning the Lang family eight times what their stake was worth four years earlier.

Another example hits closer to home for me in nearby Greenville, Texas. Polara Enterprises, a 50-year-old family business, makes pedestrian signals to tell the blind when to cross at intersections. Owner John McGaffey held a “beauty contest” attracting 10 bidders (among them six private-equity firms) and sold a majority interest to Vance Street Capital. In acquiring a stake in Polara, Vance agreed to McGaffey’s conditions: no layoffs of its 80 employees, McGaffey holds a seat on the Board, and his son and son-in-law remain executives. “‘I would have loved to have just left it with my boys, but we felt we could get a lot further in terms of our technology if we could get an outside investor, said Mr. McGaffey. ‘I didn’t want to risk all of my own capital.’” McGaffey continues to own a minority stake that will further benefit him if Polara hits it big.

Gottfried offers other examples to illustrate private equity’s entry into the domain of American family businesses. Neal Rosenthal, owner of Manhattan’s Rosenthal Wine Merchant received nine bids, ultimately selling a majority interest to Incline Equity Partners but remaining as CEO. Realizing that his daughter had no interest in taking over, the 76-year-old Rosenthal achieved peace of mind: “I am confident that if I dropped dead today, my business would continue on without me.” Rosenthal Wine Merchant has since acquired one of its distributors and another wine business, but Rosenthal has the peace of mind that it’s not his capital at risk.

Private equity buyouts don’t always have a happy ending. Examples abound where they load up a company with debt, bring in new management, lose ties with the local community, or expand irrationally and break the back of a once profitable business. All can acknowledge the risks. But with a carefully structured deal, private equity offers a business-selling family another solution to consider.

If selling a business is a part of your family’s succession plan, it’s wise to hire a professional firm to help you consider all your options.

Marvin E. Blum

Life After Selling a Family Business: The Challenges May Surprise You

January 10, 2023

In recent posts, I sounded an alert about the psychological challenges of selling a family business. It’s hard to part with your “business baby” that you gave birth to and raised since infancy. To improve the odds to making it to closing, Denise Logan cautions to plan for not only the transaction but also the transition.

The family needs to recognize how day-to-day life will feel after selling their company. It will likely feel very different, not only for those who work in the business but even for those who don’t. As author Paul Sullivan describes in “What’s Left After a Family Business Is Sold?” (New York Times, Aug. 9, 2019), “A company often holds families together by giving members a shared identity and conferring a status in the community established by previous generations. Without the company, the family’s perception of itself and its purpose can change, and it is often something that members are not prepared for.”

As a prime example, Sullivan tells the story of the Malt-O-Meal family who sold for $1.15 billion to Post Cereal. John Brooks’ grandfather started the cereal business in 1919, and it gradually grew to be the fourth-largest cereal maker in the U.S. Even four years after selling, Brooks “still felt a void in his life. Since the sale, the three branches of the family have gone their own ways, Mr. Brooks said. They are no longer bound by a company or annual meetings or feel the pride of going through the cereal plants around Minneapolis.”

Aside from the void, family members also have to deal with pressure when a high-dollar purchase price becomes public. Old friends may feel intimidated and treat you differently. New “friends” emerge. Who can you trust? Sullivan describes the awkwardness Sabrina Merage Naim felt when her father and uncle sold Chef America, the maker of Hot Pockets, to Nestlé for $2.6 billion. At the time, Naim was in high school. Naim said that at school, once people saw what the business sold for, friends said, “Oh my, you guys have money.”

Here are tips to help families adjust to life after selling a business:

• Instead of passively investing the proceeds, establish a family office to actively manage the family’s investments, philanthropy, and shared family experiences. Intentionally engage in planned activities to enrich the family. A thoughtfully structured family office can help provide “glue” that the shared business used to provide.
• Focus more on shared family values than on shared money. Ideally, that process starts long before the sale. Per Sullivan, “agreeing on family values takes time. But done right, those values can become a substitute for the company.” He refers to the Deary family who sold Great Lakes Caring Home Health and Hospice: “But years before the sale, the family had been formulating a plan for its wealth that focused on family values but also held the members accountable. A family scorecard, for example, tracks their progress on 40 items that the family has deemed important, including working hard, investing wisely, and protecting its legacy.”
• To guard against dissipation of the wealth by high-living heirs (falling victim to the proverb “shirtsleeves to shirtsleeves in three generations”), recognize that passive investment returns rarely match those of a growing business. Brooks urges his Malt-O-Meal heirs to “withdraw no more than one percent a year of his share—still a large amount of money—so that the assets could continue to grow the way his family’s business did.” For future generations to adhere to such a policy requires regular family meetings to educate heirs on investing, family values, family heritage, and the purpose of the wealth. Getting “buy in” from heirs is critical.
• Join a peer group of similarly situated colleagues. I am actively involved in such a group called TIGER 21. Attending meetings with like-minded peers in a confidential setting allows you to experience lifelong learning, share concerns, and get candid feedback. For me, TIGER 21 serves as my personal Board of Directors. Such a group can help business sellers adjust to life after a liquidity event.

If selling a business is in your family’s future, estate planning advisors can help you plan for all the post-sale challenges. The earlier you start, the better.

Marvin E. Blum

Time Makes Us Older But Wiser

January 3, 2023

Happy 2023! Thanks for going with me on this weekly journey of wisdom as I now start year three of my Family Legacy Planning blog. Last week, I put a wrap on 2022 by encouraging us to look back to see how far we’ve come from where we started. Observing that journey can inspire us to keep reaching for our full potential as we now embark on a new year.

My focus last week was on the challenge of remining physically fit as time passes. Today. I want to reflect on how the passage of time can improve our mental and emotional fitness. As Melissa Manchester sings in “Come in From the Rain,” “Time has made us older and wiser. I know I am.”

The two below photos show me with my law school buddies (the “Canoe Brothers,” as described in this May 22, 2022 post.) The “then” photo was on a trip to Port Aransas to celebrate graduating UT law school. Our bodies were fit but so were our minds. Our brains worked quickly with what Arthur Brooks describes as “fluid intelligence.” We had instant recall and could spit out calculations and thoughts quickly with precision. That sharp, razor fast intellect comes in handy in starting a legal career.

However, in his recent book Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life, Brooks explains a transition that occurs in our brains as we age. After about age 55, our brains work slower but there’s an improvement in our “crystallized intelligence.” We replace fluid intelligence with the ability to connect dots and see big picture patterns. This skill enables us to make better decisions and give better advice because it is seasoned with experience.

Clients often ask me to provide “gray-haired wisdom” based on my 44 years of real-life lawyering. Sharing guidance informed by my observations over the years may be even more meaningful to them than the lightening-fast reasoning of youth. The Canoe Brothers of the recent canoe trip photo have a different kind of intelligence than the guys in the Port Aransas photo, but it’s a kind of brain power that carries more wisdom.

Another shift that occurs over the passage of time involves our emotional fitness. Whereas “young Marvin” had a wish-list of things he hoped to buy one day, the “mature Marvin” has a different list. I have replaced my desire for things with a desire for relationships. My focus is now on having meaningful connection with thoughtful and thought-provoking people. I achieve that best by becoming part of stimulating communities, such as the Canoe Brothers, colleagues at work, civic groups, and a peer group like TIGER 21. According to Dr. Mark Hyman, “The power of community to create health is far greater than any physician, clinic, or hospital. Science now shows us that a sense of community is correlated to longer, healthier, and happier lives.”

Hyman continues with this advice: “If you want to build a community, volunteering, joining a class, and prioritizing time with loved ones are all ways to strengthen your social bonds and support your health in the process. Get involved in things you care about and your community connections will naturally fall into place.”

As we first look back to our early years and then look ahead to our tomorrows, let’s celebrate the opportunities that the future offers us—opportunities to gain wisdom, create connection with meaningful communities, and achieve not only stronger physical fitness but also stronger mental and emotional fitness.

Marvin E. Blum

The Once and Future Marvin

December 27, 2022

Here’s to the end of 2022 and welcome to 2023! Each new year brings the promise of new opportunities for personal growth. Before we look ahead, it’s good to wrap up 2022 with a moment of reflection. We can learn a lot about our future potential when we stop to look back at how far we’ve come from where we started.

As I reflect on my early years, my roots are in a loving family of modest means who instilled in me a commitment to family, hard work, and education. With both parents working in Blum’s Café, my preschool afternoons were spent with my Fort Worth grandmother “Bubbie” and her sister. I sat quietly as they watched “As the World Turns,” ate a chicken soup lunch, read the Yiddish newspaper, and napped. That recipe turned me into a scrawny, studious couch potato who watched a lot of TV and invented art projects to entertain myself.

Summers took me to Alabama to visit my mother’s parents. My grandmother Pauline’s cooking, combined with my sedentary lifestyle, soon fattened up that skinny little kid. I blame it on the banana pudding, sour cream coffee cake, and lots of bread with high fat schmears. By fourth grade, I was a chubby kid sitting in Mrs. Gulledge’s class on that fateful day when we learned the news that stands out as my premier childhood memory: President Kennedy spent his last night in Fort Worth’s Hotel Texas and then left for Dallas on the final journey of his life. I became fascinated with world events and was even more glued to the TV.

I start with those memories to compare and contrast the “then Marvin” with the “now Marvin.” I am still a lifelong learner and news junkie, but I gave up my sedentary ways in college. As my friends started to develop a beer gut, I went the opposite direction and discovered physical fitness. I was late to the party, but the benefit is that I developed fitness habits that are part of my daily routine to this day.

I write this post at my daughter Lizzy’s urging. She saw a photo of the young chubby Marvin and pushed me to promote the idea that aging doesn’t have to be a decline. She selected the side-by-side photos to contrast “fat Marvin” with my 2022 gold medal triathlon win.

This message brings to mind an excellent book aptly entitled Younger Next Year. Authors Chris Crowley and Jeremy James describe intentional steps we can take so our tomorrows can be healthier and stronger than our yesterdays. Now is a great time to start, for time flies and, as an inspiring song admonishes, before we know it “A Decade Goes by Without a Warning.” (Thank you to John Batton for recommending that song to me.)

I hope to inspire others to join me in channeling Merlin the Magician from the days of King Arthur, popularized in T.H. White’s The Once and Future King. Like Merlin, let’s attempt to live backwards and “youthen” rather than age. I recognize that prioritizing health and fitness doesn’t guarantee a long life. My brother Irwin was a fit 65-year-old who suddenly died of pancreatic cancer. The message is to do your best to improve the odds but remain realistic about the risks of aging.

As both a fitness guy and an estate planning lawyer, I’ll combine those roles into some recommended New Year’s Resolutions. Yes—eat heathier and get exercise but also make it a 2023 goal to take your estate plan on a “test drive” by asking, if I were suddenly gone, are all my affairs in order?

As we turn now our attention away from the past and toward all the promise that 2023 holds, I wish you a healthy, productive, and meaningful year.

Marvin E. Blum

When Failure Happens, Send a Thank You Note

December 20, 2022

For last week’s 100th post, I channeled Ben Franklin and shared a mini “Poor Marvin’s Almanac,” a collection of some of my favorite sayings. Here’s another: You learn more from your failures than your successes. When my first job as a lawyer didn’t work out to my liking and I left to open my own firm, my father-in-law Abe Kriger wisely said, “Send them a thank you note.” Abe knew the law firm did me a favor. He assured me I would move on to bigger and better. Because of my dissatisfaction at my prior job, I formed The Blum Firm, which has become the source of immense career satisfaction.

Jim Collins echoes this theme in Good to Great, declaring, “The enemy of great is good.” A job that is just “good” can deter you from creating a career that is “great.” Failure, though painful at the time, opens the door for us to explore opportunities we would otherwise miss.

My prior job experience provided me with a goal when I started The Blum Firm. My mission was to create a work environment where people wouldn’t dread coming to work. I vowed to build a caring culture, one centered around caring for every team member and every client. This law firm camaraderie serves our clients well. Our “open door” environment encourages us to share ideas and stimulates our creative juices. This collaborative atmosphere enables The Blum Firm to generate “outside the box” solutions to address our clients’ needs.

The path from “then” to “now” hasn’t been a perfect upward slope. Failures continue to pop up that provide me with teachable moments. For example, as a young lawyer, I thought I could work with anyone. Early on, I teamed up with some colleagues who turned out were not a good fit. That partnership failed. But, the next time I selected partners, I got it right. I learned from my mistake that I’m extremely exacting and only mesh with others who share my style. Once when I was tempted to bend and hire a lawyer not up to those standards, my law partner Pete Geren awakened me by writing on that resume the words: “Not even close.” I never forgot that lesson.

In a family meeting I facilitated, the patriarch wanted to share his success story. He was surprised when his children preferred to hear about the failures he’d encountered along the way and what he learned from them.

In the Sabbath Torah portion 10 days ago, we read of Jacob wrestling with an angel. Jacob wins the battle. As a result, the angel blesses Jacob and rewards him with a Divine covenant. Like the Biblical Jacob, our greatest achievements and blessings often come to us only by prevailing through a struggle.

As we wrap up the year, may we resolve to see failure as an opportunity. As my son Adam says to me when failure happens, “Don’t be hard on yourself.” And when faced with a risky challenge that offers high-stakes rewards, let’s not allow the fear of failure to deter us. If the worst that can happen is that we fail, let’s remember that failure is a great teacher. The temporary pain is better than not achieving success because we never tried.

Wishing all a Merry Christmas and a Happy Chanukah!

Marvin E. Blum

My 100th Post: Poor Marvin’s Almanac

December 13, 2022

When The Blum Firm reached our 40th anniversary in late 2020, I was searching for a way to commemorate it. My law practice had always focused on tax and estate planning, but in the prior decade I had adopted a passion for also helping families create and pass down a meaningful legacy. My goal was to not only prepare the money for the family (passing down the largest possible inheritance), but to also prepare the family for the money (preparing heirs to receive that inheritance). I also began to understand that an inheritance is about a lot more than money. Families pass down not only their financial capital, but also their human, social, intellectual, and spiritual capitals. To celebrate the firm’s 40th, I decided to write a weekly series on Family Legacy Planning to offer tips on how to create family glue, improving the odds of multigenerational success.

When I launched this project, I anticipated telling everything I knew about legacy planning over the course of several weeks. Well, here we are 100 posts later, and I’m still writing. The feedback I’ve received has been immensely gratifying. Each week, I receive encouragement to share more, in particular personal stories from my own life journey. I never expected this blog to take off the way it has, but I am grateful to be reaching this 100th milestone.

In selecting a topic for today’s post, I’m channeling one of our Founding Fathers, Benjamin Franklin, whose Poor Richard’s Almanac became a site for him to offer some good old-fashioned advice for better living. Like everyone, I’ve accumulated a collection of my own words of wisdom. At the urging of a number of you, and inspired by Father Ben, I’ll share some random lessons in life that I hold dear. I’m careful not to push my advice on someone unless they sincerely want it, which brings me to my first piece of advice:

• From an old “Dear Abby” column: Before you offer someone advice, first ask them if they want it. Unless they respond with an enthusiastic yes, the answer is no.
• From my wife: Take the high road. (Sometimes we ask her where that is, and she always helps us find it.)
• From my mother: The most important decision you make in life is who you marry. (I’m glad I listened!)
• From my father: The only helping hand you need is the one at the end of your own arm.
• From my son: Work smart, not just hard.
• From my daughter (the family historian): If you don’t document it, it didn’t happen.
• From my mother-in-law (always on the go doing “good turns” for others): Don’t go to bed at night until you’ve done at least one good turn that day.
• From my father-in-law: You catch more flies with honey than vinegar.
• From my former long-time assistant Mary Staudt: Pay attention to the signs. When someone tells you who they are, you should believe them– the first time.
• From my best friend Talmage Boston: Ask for what you want. The worst that can happen is they say no, but they might say yes.
• From a relative Donald Adler about family trips: Remember, it’s everyone’s vacation.
• Two from my friend Bruce Moon’s mother: (1) Time speeds up; (2) It’s always something. (Isn’t that the truth!)
• From a dear departed friend Anne Marie Hartsell: When you get upset, remember the “100-year theory.” Ask yourself: Will this matter in 100 years?
• Marvin’s famous three: (1) Take a light courseload your first semester of college so you don’t dig a hole in your GPA; (2) Wedding planning is a recipe for friction, so the shorter the engagement, the better; (3) It’s never the “right time” to get married, have a baby, or start a business. You just have to do it.
• I’ll wrap up with a favorite from Ben Franklin, which totally speaks to where my life is now: A true friend is the best possession.

I could go on and on, but I’ll close on that high note. This is just a random list that came to my mind today. I welcome hearing your favorite sayings so I can add them to my collection.

I dedicate these first 100 posts to all of you, whose encouragement has inspired me to keep writing. Many of you have even urged me to write a book on legacy planning. Maybe I’ll tackle that one day. In the meantime, I’ll try to keep these lessons coming ‘till my brain hits empty.

With gratitude,
Marvin E. Blum

Sell a Business, Save a Family

December 6, 2022

In recent posts focusing on Business Succession Planning, I’ve recognized that often the best solution for the family is to bite the bullet and sell the business. As Denise Logan describes in The Seller’s Journey, that’s a bitter pill for most business founders to swallow. She likens it to the pit in your stomach the day you drop your oldest child off at college. Accordingly, Logan asserts that 70% of business owners fail to follow through to closing. To improve the odds, Logan urges advisors to focus not only on the transaction, but also on the owner’s transition. There are both head and heart issues at play in selling a business.

An example of a business sale success story that did make it to the finish line is Pac Paper, Inc. of Vancouver, Washington, manufacturer of paper sleeves for coffee cups and other paper products. The business had been in the family over 40 years, passed down by father to son David Morgan. Like most business owners, Morgan had no intention of selling the company, assuming it would stay in the family for generations to come. Out-of-the-blue, Morgan began receiving unsolicited call from competitors wanting to buy the company. It got Morgan thinking: who in the family was suited to run the business after him? Hard though it was to admit, Morgan came to the conclusion that the next generation wasn’t in a position to take over leading the business. He also realized that good offers wouldn’t stay on the table forever. Morgan and other co-owners accepted reality and sold the family business to a rival company. They knew that a sale was the best way to preserve family unity going forward.

For those in similar shoes to the Pac Paper Morgan family, there are steps to take prior to going to market that can help the family get the best price. My thanks to Kasper & Associates, a Fort Worth professional merger and acquisition firm, for providing me the following list entitled Business Exit: Tips to Maximize Value:

• If possible, begin preparing to sell your business 1-2 years before the expected listing date.
• Get all major shareholders and your spouse to agree with the plan to sell. Don’t assume your spouse or major shareholders will sign whatever is put in front of them to effect the sale. Seek professional help on this matter as needed.
• Try to keep an open mind about the potential value and be flexible about the terms of a proposed transaction.
• Explore tax savings strategies with your CPA or other tax advisor.
• Replace family member employees unless they plan to remain with the business after it is sold.
• In order to boost your company’s profitability, reduce or eliminate unnecessary perquisites you receive from the business.
• Replace non-productive employees with productive ones.
• Develop key employee job descriptions/resumes and an organization chart which includes all employees.
• Execute employment contracts for key employees.
• Reduce receivables; clean up your company’s financial reports; update inventory records.
• Settle liabilities and pending litigation.
• Spruce up the facility inside and out.
• Upgrade your company’s technology and fine-tune customer records using up-to-date software.
• Do post-retirement financial planning with your financial advisor.
• Develop a relationship with a professional Merger & Acquisition Specialist 1-2 years in advance of anticipated listing date and request an opinion of current market value of your company.

I’ll add another point to this list:

• Plan ahead to fill the void in your life created by selling the business. I’ll dive deeper into this point in upcoming posts and offer guidance from real-life experiences.

For those of you who are still struggling with the idea of ever selling your family business baby, I’ll close with wisdom from a family matriarch. Dennis Jaffe tells the story of a letter written by the wife of a business founder, read annually to future generations of the family. As precious to the family as the business that “Papa” built is, the matriarch acknowledges in the following Legacy Letter that circumstances could arise where they may have to sell the business in order to save the family:

“Greetings to all of you as you gather for the annual family meeting. I want you to think about a paradox—Money is important./Money is not important. There’s a lot of truth in both statements. You’ve come a long way, babies, but remember where you came from—know your roots. T. S. Eliot said, “Where is the life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

You need knowledge, wisdom, and vision. It’s our job to be good stewards of the gifts Papa left us. There are pitfalls inherent in having a family business. Be vigilant for the warning signs. I would rather you dismantle the family business than squabble over it.”

I urge all to conduct an honest assessment of your family and determine if the best course is to keep the business or sell it. No matter how precious it may feel to preserve the business, preserving the family is even more precious.

Marvin E. Blum

You’re Having a “Liquidity Event” and Making a Gift to Charity: The Order of Events Matters!

November 29, 2022

In my series on Business Succession Planning, I’ve identified three choices for transfer of a business: (1) transfer to family members; (2) sale to employees/insiders; and (3) sale to an outside third party. After a candid assessment, it often becomes clear that the first choice isn’t a workable option. That leaves the owner with a sale of the business, whether to inside parties or outside parties.

When an owner sells a business, it frequently is the first time the family has substantial liquid assets. That’s why the sale of a business is commonly referred to as a “Liquidity Event.”

On a light-hearted note, I’ve kidded with my wife Laurie that so many of the men I represent who’ve had a liquidity event go buy a bright blue blazer and seem to wear it everywhere they go. Laurie and I call it a “Liquidity Blazer,” and I lamented that I’ll never have a liquidity event enabling me to buy one. We were having this conversation when I was in Las Vegas to give a speech, walking around Caesar’s Mall to pass the time (since you won’t find me at a gambling table). There in the window of Brooks Brothers was the Liquidity Blazer of my dreams, and Laurie made me try it on—perfect fit, no need for alterations. Laurie convinced me that (even without a liquidity event) I deserved it, and I wore it the next day when I gave my speech.

On a more serious note, selling a business also provides the owner with the liquidity to satisfy long-held desires to make substantial charitable contributions. All too often, business sellers contact me AFTER the sale has closed for charitable giving guidance. If only I could wind the clock back, there’s a better order of events that could’ve saved them a lot of tax. Consider this example: Owner sells business for $10 million and then donates $1 million to charity, leaving the owner with $9 million before tax. Owner reports income of $10 million (for simplicity, assume a zero basis), and takes a deduction for the $1 million charitable gift, paying tax on $9 million. Rewind the clock: owner donates 10% of the business just prior to entering into the sales contract. At closing, owner receives $9 million, and the charity receives $1 million. Owner reports income of $9 million and takes a deduction for the charitable gift of a 10% slice of the business (appraised at close to $1 million in value), paying tax on approximately $8 million. Bottom line: by making the gift to charity BEFORE the sale, owner saves income tax on $1 million of the sales proceeds.

The following chart illustrates this timeline. To supercharge the family’s tax savings, note the recommendation to do “squeeze & freeze” planning well in advance of the sale. Such planning shifts the business into trusts that are out of the estate, avoiding the 40% estate tax at death. There are trust structures that allow you to achieve this outcome, yet retain access, control, and flexibility. The most popular trust options are SLATs, 678 Trusts, DGTs, and GRATs. Also note that making the charitable gift too close to the closing date runs the risk of an “assignment of income,” killing the above-described tax benefit. Also, be aware that a pre-transaction charitable gift of a family business needs to be made to a public charity or donor advised fund, in order to deduct the fair market value of the gifted business interest. Consult a tax advisor to help you achieve the best tax outcome.

To take these tax savings up to the limit, consider these two recent examples where the owner gave away the ENTIRE business: electronics giant Tripp Lite ($1.6 billion value) and outdoor apparel maker Patagonia ($3 billion value).

• Barre Seid donated 100% of Tripp Lite to Marble Freedom Trust, a non-profit devoted to conservative causes. After the donation, the company was sold for $1.65 billion, with all the proceeds going to Marble Freedom Trust free of income tax.

• The Chouinard family donated 2% of their Patagonia stock (all the voting shares) to a new Patagonia Purpose Trust, and 98% of their stock (all non-voting) to Holdfast Collective, a non-profit devoted to protecting the environment.

Neither family will pay any tax when Marble Freedom or Holdfast sells the business it owns, and all the proceeds will be committed to causes important to that family. Ironically, those causes are opposite: Marble Freedom funds efforts to stop action on climate change; Holdfast funds efforts to combat climate change. That’s yet another example of the polarized world we’re living in today. [Note that since these two nonprofits are politically focused, they are 501(c)4 rather than 501(c)3 organizations, so the contributions to them are not deductible, but the income they earn is exempt from tax. Furthermore, supporters can donate assets that the 501(c)4 sells and avoid capital gains taxes on the sale.] By donating a business to support charitable causes, the entire amount of the sales proceeds goes to charity without diminishing any of it to pay income tax on the sale.

Here’s the key takeaway: if you sell a business or other asset and want to commit part or all of the proceeds to charitable causes, make the gift BEFORE you sell.

Marvin E. Blum

Family Legacy Planning: It’s All About Football

November 22, 2022

Happy Thanksgiving to all! If your home is like mine, part of the day’s traditions will include a football game, with some of us glued to the TV to cheer on the Dallas Cowboys (while others just tolerate it as background noise). Preserving holiday traditions helps keep families connected. Whether yours are more about football or desserts, I applaud the importance of keeping those traditions alive. As Tevye sang in “Fiddler on the Roof,” “without our traditions, our lives would be as shaky as a fiddler on the roof!”

While I’m in a football state of mind, I’ll repeat a favorite metaphor from Jim Grubman. Picture a football field. At one end is a highly skilled quarterback who hurls a perfect pass to the other end of the field. Standing around at the other end are a bunch of clueless receivers. They’ve never been to a practice. They don’t know the rules of the game. They’ve had no experience learning to work together as a team. What are the odds they’ll catch the pass and score a touchdown? Statistics say the odds are only 10%. The quarterback is the family patriarch/matriarch. The football is an inheritance. The receivers are kids and grandkids who have never been prepared for the inheritance coming their way. This football analogy helps us understand the importance of preparing heirs before the inheritance comes their way. That’s what Legacy Planning is all about: improving the odds that your heirs won’t fumble the inheritance football when it comes to them. As Matt Wesley urges, it’s time for the patriarch to move from being the quarterback to being the coach.

In recent weeks, my Family Legacy Planning series has been devoted to the topic of Business Succession Planning. Nowhere is business transition planning more complicated than in the National Football League. Media coverage is replete with family strife over control of an NFL franchise. It’s a hot topic, as the dollars are astronomical, and the transfer of team ownership is imminent. As Ben Fischer reveals in “NFL, Next Person Up,” (Sports Business Journal, Sept. 5, 2022), the average age of the 32 controlling NFL owners is 72. Only eight are below 65. Two of the league’s most powerful are Patriots’ Robert Kraft at 81 and Cowboys’ Jerry Jones at 80. Ready or not, change is coming.

NFL Commissioner Roger Goodell (himself 63 and purportedly contemplating retirement) is committed to developing the next generation of owners. The NFL provides apprenticeships in a junior rotational program, promoting the most talented to serve on committees. Every year, each team must report to the NFL who will take over in case of a sudden vacancy. Per Fischer, the ideal scenario is to create “legacy families,” keeping the business in families where the NFL is their top priority. The goal is to pave the way for a smooth transition when guys like Kraft and Jones are gone. The NFL is trying. “But a litany of factors, among them complicated estate planning and unpredictable family, legal and tax dynamics, figure to make orderly successions within a single family the exception rather than the rule.”

The NFL is waking up to the importance of estate planning. It now allows ownership to be transferred to trusts. It’s also lowered the minimum equity ownership of the family’s head to as little as 1%, recognizing the need for families to do planning to minimize estate tax and avoid a forced sale soon after the owner dies. Even with all the NFL’s efforts, challenges persist. Consider these examples:

• The requirement that teams file an annual succession plan began after Tennessee Titans owner Bud Adams died in October 2013. Adams divided the ownership equally among three branches of his family, leading to a war over which would have power and control over the team. By requiring the annual designation of a successor, the NFL hopes to avoid a repeat of that strife when an owner dies.

• Alzheimer’s disease forced Denver Broncos owner Pat Bowlen to turn over control to President Joe Ellis in 2014, followed by litigation among his kids over who would succeed him. The result? The team was put up for sale in February 2022 and sold four months later to a group led by former Walmart chairman Rob Walton for $4.65 billion, the highest price ever paid for a US professional sports team.

• Houston Texans owner Bob McNair died in 2018, leaving the team to wife Janice with son Cal running the show. In the next three seasons, the team fired a general manager, two coaches, and a president. To add insult to injury, the Texans won just four games in two seasons and fell to 17th in attendance.

• Washington Commanders’ owner Dan Snyder is reportedly considering a sale of the franchise, a team he bought in 1999 for $750 million that now has an estimated value of $5.6 billion. The prospective sale comes after repeated scandals, including accusations of a toxic work environment. There’s a lot of speculation of who a new buyer might be, but any transaction would have to be approved by 75% of NFL team owners. The situation is messy, to say the least, and not the kind of ideal transition the NFL desires.

• One of the most painful stories involves Joe Robbie, owner of the Miami Dolphins. At his death in 1990, Robbie left behind a wife Elizabeth and nine children. His Pourover Will sent his assets to a Living Trust, and unknown to Elizabeth and most of the kids, he named three of the children as co-trustees. The co-trustees sold part of the franchise to Wayne Huizenga (former owner of Blockbuster Video), infuriating Elizabeth and the six other children. A family feud erupted that tore the family apart. When Elizabeth died almost two years after Joe, she left nothing to two of the kids and only $200,000 each to two other kids. The family had to sell 85% of the Dolphins franchise and 50% of Joe Robbie Stadium to pay a $45 million estate tax bill and to satisfy a claim Elizabeth filed against Joe’s estate.

• Tom Benson, owner of the New Orleans Saints (as well as NBA Pelicans basketball franchise) changed his Will at age 87, only a month after a court found him mentally competent. The legal battle, filed by daughter Renee and grandchildren Rita and Ryan, cited powerful evidence of incapacity and alleged Benson was being manipulated by his third wife of 10 years, Gayle, then age 68. The new Will gave sole power over the franchises to Gayle, stating: “I specifically provide that Renee Benson, Rita LeBlanc, Ryan LeBlanc, and all of their descendants shall have no interest whatsoever, and no legacy or other inheritance or benefit of any kind shall be paid to any of them under this will or otherwise.” Benson had previously designated granddaughter Rita to control the teams, but everything changed after an argument erupted between Gayle and Rita at a 2014 Saints game. Needless to say, Gayle (who once ran a home jewelry business and was twice previously divorced) won that fight.

The lessons from these NFL horror stories abound. Suffice to say that the solution lies in tackling the problem long before the team owner dies. As my Family Legacy Series continually reiterates, we should learn from the best practices of the 10% who win the Super Bowl of Family Legacy Planning. Don’t fumble the ball like those 90% who fall victim to “shirtsleeves to shirtsleeves in three generations.” Your estate planning advisors can help you embark on regular family meetings, create a family governance structure, engage in thoughtful business succession planning, and preserve your family values and heritage—starting right now with some special Thanksgiving traditions!

I wish you all a joyful and meaningful Thanksgiving, filled with gratitude for our abundant blessings.

Marvin E. Blum

In Search of “Family Glue”

November 15, 2022

Last week’s post recapped a “Lasting Legacy” evening where I was honored to share the stage with the Coors beer family. I described how the Coors family connection remains strong even among fifth generation descendants of Adolph Coors. Today’s post focuses on my part of the presentation: “In Search of Family Glue: Improving the Odds of Multi-Generational Success.”

After Coors sisters Melissa and Carrie shared secrets of their success, I revealed that the Coors story is the exception. A staggering 90% of families fall victim to the adage “Shirtsleeves to shirtsleeves in three generations.” Only 10% of families can tell the Coors story. There is much to learn from them. The bulk of my speech highlights best practices of the ten percenters like Coors. Click here to review my PowerPoint from that presentation.

In a nutshell, I identified 9 best practices of successful families for us to emulate:

1. Family Meetings
2. Family Travel
3. Education Program
4. Governance Structure
5. Family Mission Statement
6. Business Succession Planning
7. Preserve Family History
8. Family Traditions
9. Legacy Letter

I concluded by shining a light on a 10th best practice—Family Philanthropy. By creating a charitable structure in your estate plan, you leave your heirs two inheritances: (1) a traditional inheritance to provide for their security and needs; and (2) a second inheritance giving them the opportunity to use the family assets to give back.

Family Philanthropy is a gift that keeps on giving, not only to the recipients of grants, but also to the donors. Those who give get back more than they give. I described a Family Foundation as a “laboratory” where family members come together to practice group decision making as they jointly select causes to support. As they manage foundation funds, they learn about investing and money management. Through private philanthropy, they can set a vision for their community and shape the future of the place where they live. Moreover, these interactions create connectedness and powerful family glue.

It was a privilege for me to share my thoughts on building family connection. The goal is to create an interdependent family who will be there for each other. In my 44 years of law practice, as well as in my own life, I’ve learned that when adversity strikes, there’s no support system more critical than your family.

I urge everyone to take intentional steps to strengthen your family and create family “glue.”

Marvin E. Blum

Family Unity: An Evening About Glue & Beer

November 8, 2022

I was honored to speak recently at a “Lasting Legacy” seminar sponsored by The Miles Foundation and Tailwind Philanthropic Advisors as one of two presenters. My topic was “In Search of ‘Family Glue’: Improving the Odds of Multi-Generational Success.” So there’s the “glue.” Where’s the beer come in? The other presenter was the Coors beer family, a real-life example of multi-generational success and keeping the business in the family.

The event kicked off with a Q&A session with sisters Melissa Coors Osborn and Carrie Coors Tynan, two Generation 5 (“G-5”) descendants of Adolph Coors who founded The Coors Brewing Company in 1873 in Colorado. Adolph passed the company down to G-3: grandsons Joseph and William. Joseph’s 5 sons and William’s son (all members of G-4) all work in the Coors business. Now G-5 is taking up the mantle. Melissa heads up the Coors Family Office. Carrie heads up the Adolph Coors Foundation.

Melissa and Carrie gave an enlightening peek behind the curtain to illustrate how the Coors have preserved family glue for five generations. They credit their ancestors for setting a clear vision, not just for the company, but also for the family.
Many business owners cultivate a solid business culture; the Coors have also cultivated a solid family culture.

The Coors cohesiveness is no accident. Melissa and Carrie revealed how their forefathers intentionally created a governance system. Their ancestors also instilled in them a strong work ethic. Their father made it clear that career choices needed to generate sufficient income for their needs. There would be no “trust babies” relying on a trust distribution to cover their lifestyle.

At family meetings, the sisters shared how they mix business and fun. To provide levity when things get too heavy, there’s a variety of stuffed animals down the center of the table. Each symbolizes a different behavior trait. One example that stuck with me was tossing a donkey at a relative who was acting like a you know what. Laughter erupts, and the tension subsides. Every family needs a system to address conflict—this was a new way for me.

Selecting Melissa and Carrie for their governance roles makes an important point when selecting a successor manager: don’t overlook the females in the family. Statistics show that females fare extremely well in taking over a family business. According to a Merrill Lynch study:

• Women make more values-based decisions rather than just going for the bottom line. They see money as more than a way to finance the life they want to live but also as a way to meet commitments to themselves and to people and issues they care about.
• Women live, on average, five years longer than men. Women may be around longer to run the business.
• Women graduate in higher numbers from college and graduate school today than men (57% of recent college graduates).
• 42% of women ages 18-64 have a bachelor’s degree or higher.
• A mother typically spends a lot of energy maintaining the emotional cohesiveness of a family and keeping the peace among family members. This mindset can be a positive force in a business.

So that’s the “beer” story. The Coors example is inspiring. Next week’s post will focus on the “glue” as I share tips on how to create some “super glue” to keep your legacy intact for future generations.

Marvin E. Blum

When Your Business Succession Solution Isn’t Your Kids

November 1, 2022

In last week’s post, I shared the story of my son Adam breaking the news to me that he didn’t want to become a lawyer and join me at The Blum Firm. Like many family business owners, I had to come to grips with the fact that the next generation (G-2) wouldn’t be taking over the business. What are the business transition choices when G-2 isn’t the solution? As I concluded last week, there are a lot of options. Let’s explore some here.

As I’ve expressed numerous times, I’m in the camp with many others who often look to Warren Buffett for guidance. The “Oracle of Omaha” is adopting a blended approach. Although none of his children will step into Buffett’s shoes and take over management of Berkshire Hathaway, G-2 will still play an important role. Son Howard and daughter Susan are on the Berkshire Board of Directors “not for operational decisions, but to retain the ‘culture.’ … All three of my children are devoted to maintaining the culture of the place…. They have an unusual amount of devotion to that.” (Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021). Son Peter will also play a role in the family enterprises as director of the Susan Thompson Buffett Foundation (named for Buffett’s late wife) which oversees the family’s charitable giving. This hybrid approach is instructive when the business ownership remains in the family, yet someone other than G-2 handles the day-to-day operations. G-2 can still play an influential role on the board of directors, helping to preserve the family legacy and protect the all-important business culture.

There are numerous other solutions to consider when exploring the options for transitioning a family business. PNC’s Editorial National Practice Group provides an excellent overview of choices in the article “Lowering the Hurdles to a Successful Family Business Transfer” (PNC Insights, Nov. 5, 2021). Here’s a recap of their ideas, as well as some others:

• Leveraged Buy-Out: If the goal is for some or all of the next gen to purchase the business (as opposed to receiving it as a gift or bequest), G-2 could borrow from a third party, pledge business assets as collateral, and use profits to repay the loan.
• Installment Sale: The business owner carries a note, and the buyer uses profits to pay off the note over a term of years. The terms are ideally pre-arranged in a Buy/Sell Agreement entered into long before the event that triggers the buyout.
• Self-Cancelling Installment Note (SCIN): The seller receives a cash flow until the note is paid in full, but any unpaid balance of the note is forgiven when the seller dies. The buyer pays a premium (either a higher price or higher interest rate) for the cancellation privilege.
• Sale for a Private Annuity: This is similar to a SCIN, except payments continue for the life of the seller, and then terminate at the seller’s death.
• Non-Qualified Deferred Compensation: The business continues to pay compensation to the owner after retirement. Such payments are deductible by the company, whereas installment payments aren’t. However, the recipient pays ordinary rather than capital gains tax rate.
• Charitable Solutions: Transfer the business to a CRUT (Charitable Remainder Unitrust) which makes an annual payout to the owner, with the trust assets passing to charity at the owner’s death.
• Sale to a Grantor Trust: Do a “freeze” sale for a note to lock in the value in the owner’s estate. Explore a sale to an Intentionally Defective Grantor Trust (IDGT), Spousal Lifetime Access Trust (SLAT), and/or 678 Trust (also known as a Beneficiary Defective Trust or BDT). Because of Grantor Trust tax rules, there is no tax on the sale, and the owner continues to pay income tax on the trust’s income for as long as he’s willing, further reducing his estate tax.
• Retain Key Employees: Using Equity – Grant to employees stock, stock options, restricted stock, non-voting stock, ROFRs (Rights of First Refusal). Using Non-Equity – Grant phantom stock, SAR (Stock Appreciation Rights) Plans, non-qualified deferred compensation, executive bonus arrangements, Stay Bonus Plans/Golden Handcuffs.
• ESOP (Employee Stock Ownership Plan): An ESOP is a qualified employee benefit plan that buys stock from the owner. Through careful structuring, the owner can defer tax on the sale of his stock by reinvesting in qualified securities. If the owner holds the replacement property until death and gets a basis step-up, the owner’s family completely avoids income tax on the sale.
• Sale to a Third Party: In many cases, this is the choice that makes the most sense for the family, yet hardest when there’s a strong emotional attachment to the business.

In upcoming posts, we’ll dive into the practical and psychological issues at play in selling a family business. As a foreshadowing, I’ll offer some words of wisdom from Denise Logan, author of The Seller’s Journey. Logan speaks of the feeling you have the day you drop off your oldest child at college. I remember that pit in my stomach when Adam left for UT. Per Logan, that’s the same feeling a founder has when he sells his business. For that reason, more than 70% of owners fail to follow through with selling their businesses. To improve the odds of making it to closing, Logan stresses that advisors must tend to not only the transaction, but also the owner’s transition, helping the owner cope with the prospect of life after selling a business.

As we explore both the “head” and “heart” side of selling your business baby, I’ll offer examples and tips. There’s a way to get there. Even the Rockefellers sold Rock Center.

Marvin E. Blum

Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021 available here.
PNC Insights, Nov. 5, 2021 available here.

The Day Adam Told Me: “I Don’t Want to Be a Lawyer”

October 25, 2022

I wrote last week about how to improve the odds of passing down a family business to the next generation. Understandably, when founders love their business, most want it to stay in the family. I can relate. As I was pouring my heart and soul into building my law practice, I always assumed my son Adam would one day join The Blum Firm and help keep the Blum legacy alive.

Then one day during Adam’s undergrad years at UT, we had the conversation that awakened me to the fact that Adam’s head wasn’t in the same place as mine. Laurie and I were walking with Adam along downtown Austin’s Sixth Street when he announced: “I don’t want to go to law school. I want to be a banker.” What? I didn’t even know what a “banker” was, at least not the kind Adam meant. I only knew of Laurie’s “banker” career as a bank officer at Fort Worth National Bank. Adam meant a Wall Street “banker,” and before long he headed to New York for an investment banking career at Goldman Sachs. At least Adam did accommodate me by becoming a CPA (though he never practiced accounting), but he tried to get out of that too. When he hit me with the line, “I don’t plan to take the CPA exam,” I wasn’t as accepting. I replied: “You had the misfortune of being born into the wrong family; becoming a CPA is not optional.”

Lizzy had the same potential to join The Blum Firm, given her superb academics and math skills, as well as her heart for helping others, but I learned from Adam not to even hold out the hope. Indeed, when she turned down UT Business Honors to study music business at NYU, reality hit that neither of my kids would join me at The Blum Firm. Neither wanted to follow my footsteps, get up every morning, put on a suit, and “go talk to people about dying.” (Of course, my life’s work is so much more than that, as my fervent passion is to help families create and pass down a meaningful legacy.)

So, here’s the message to family business owners: Don’t assume the next gen is the solution to your business succession plan. I advise all business owners to conduct an honest assessment of their heirs. Do they have the necessary skills to run the business? Do they have the passion and desire? Would they prefer to chart their own career path? Could passing the business down to the next generation lead to family friction that’s just not worth it?

Estate planning advisors can help you determine if an in-family transition is the right solution for your business. It’s better if these conversations are conducted by an advisor who knows you and your family. Parents often have a blind spot about their children’s true abilities. Kids are often reluctant to share their true feelings with their parents for fear of offending them. An advisor with good communication skills (one who has both “head” and “heart”) can interview the stakeholders and provide an objective assessment. Furthermore, whatever is decided, that decision needs to be monitored and subject to modification based on future developments. Business succession planning is never a “one and done” decision, but a dynamic and continuing process like all other aspects of estate planning.

In one case, an 80-year-old father was keeping the business going to pass down later but believed his 60-year-old son was “not yet ready” to take it over. In interviewing the son, the consultant learned that the son really had no interest in running the business and was ready to retire. Imagine the dad’s surprise.

Family business consultant Jeff Savlov tells of a St. Lucia rainforest tour guide business “Oliver & Son” where Oliver Sr. gave top-quality tours, yet a tour experience with Oliver Jr. was the opposite. Oliver Jr. lacked both his father’s skills as well as his father’s interest. “In family businesses, success or failure often hinges on intentionally and proactively developing the next generation. That requires effort to find out if they have interest, desire and ability – supporting/developing them if they do and finding alternatives if they don’t.”

Shark Tank TV personality Kevin O’Leary (aka “Mr. Wonderful”) speaks to this issue in “Kevin O’Leary on the Wealth-Destroying Mistake He Sees Too Many Family Businesses Make” (Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021). “One of the biggest mistakes of all made by successful first-generation founders is when a family patriarch or matriarch assumes the right decision is to turn the business over to their children…. When businesses are wildly successful, it’s often because the founders, a mother or father, have tremendous operational skills but those execution skills may not be present in the subsequent generation. That’s why we see American wealth evaporate within four generations.”

If your business succession solution isn’t to pass down the business to your kids, there are abundant other solutions. In upcoming posts, I’ll address those choices. Some involve ways to structure a sale to insiders (such as certain family members or key employees) using various leveraged buy-out approaches and Buy/Sell Agreements. Others involve deferred compensation arrangements. Still others involve the use of charitable techniques. We will also explore how to keep key employees engaged, either through equity or non-equity incentives. We will also examine the practical and emotional issues involved in selling a business to a third party, whether to a private equity buyer or otherwise. The key is to work with advisors who can help you identify the solution that’s the best fit for your family.

For those clinging to the hope of keeping the business in the family, click on this link to review last week’s post “No One Owns the Tree” to improve the odds of success. But this a decision that requires a heavy dose of reality. If passing down a business to your children isn’t the right business transition plan, don’t force it.

Marvin E. Blum

Jeff Savlov’s Family Minute Business Blog available here.
“Kevin O’Leary on the Wealth-Destroying Mistake He Sees Too Many Family Businesses Make” available here.

How to Keep a Business in the Family: “No One Owns the Tree”

October 18, 2022

Last week’s post described how a family business like Blum’s Café can become like another member of the family. When a family is attached to their business, it’s a strong psychological and emotional pull. The founder’s dream is usually to pass the business down from generation to generation. But to keep a business within the family, you have to cultivate the family to run it. It doesn’t happen automatically.

Consider the example of Hobby Lobby founder David Green. Here’s what I learned in a conversation with Mr. Green in 2019.

• To pursue his idea of making picture frames in his garage in 1970, Green borrowed $600 from an Oklahoma bank. After one year, he repaid the loan and tried to borrow $1,000, but the bank refused.
• In 1972, he opened his first Hobby Lobby, a 300 square feet store. Green opened his second store in 1975. He continued to grow, one store at a time.
• By 2019, there were 900 stores carrying 100,000 items with 40,000 employees and sales of $5.5 billion.
• Green began involving his children and grandchildren in the business early on, along with their spouses. “We treat in-laws the same as family.” The family gathers in person for team building exercises each month to build trusting relationships and open communication.
• Green funded 100% of the voting stock into the Green Stewardship Trust, a dynasty trust Green compares to a “ministry.” Heirs are taught that they are stewards of the business, not owners.
• He describes the Hobby Lobby business as a tree. “No one owns the tree.” Each family member has the opportunity to work in the business and enjoy the fruits of their labors. Per Green, this arrangement “avoids the friction that ownership causes.”

If the goal is to pass the business to further generations, it’s critical to prepare them for it. In “Plan a Smooth Succession for Your Family Business,” (Harvard Business Review, Sept. 13, 2022), Amy Castoro and Fred Krawchuk emphasize that G-1 needs to engage G-2 in the business at a young age. Teach heirs the history of the company, both the ups and the downs. Younger heirs need to shadow family business leaders. The goal is to develop trust, so each believes the other is “sincere, reliable, caring, and competent.” G-1 and G-2 need to agree on written criteria to show when G-2 is ready to take over. As G-1 ages, he must resist the temptation to tighten his controls over the business and instead honor the standards for readiness that were co-established.

I often describe the mentoring process as having G-2 “ride around in the truck” with G-1. One of my clients did precisely that with his son-in-law for several years, so G-2 was ready when G-1 died unexpectedly. Because the son-in-law was trained, the business continued without interruption, avoiding potential disaster. As Mike Benedict of BOK Financial says, “Few things are more frightening than losing the captain of the ship without guidance on what to do in such an event.”

For additional guidance on “Keeping It in the Family,” click on this link for my tips on timing, training a successor, management transition, a cash flow for all owners, and an exit strategy for all owners.

Remember, engaging in planning to pass a business to heirs isn’t only for mega-sized businesses like Hobby Lobby. In “Saving the Family Business in a Beach Town Where Money Talks” (New York Times, Aug. 12, 2022), Alyson Krueger highlights three mom-and-pop shops. In each, the children speak with pride of carrying on a family business. The stories of Daunt’s Albatross Motel, Montauk T-shirts, and Gig Shack on New York’s Long Island are heartwarming.

In each case, the kids grew up embracing the business as if it were another family member. Even though they could close the business and sell the real estate for a fortune, “it was more important to all of us to continue the family tradition” and keep the business alive. That’s how it feels when you love your business like it’s family.

Marvin E. Blum

How a Jukebox Paid for My Bar Mitzvah

October 11, 2022

This post in my Family Legacy Planning series continues to shine a light on Business Succession Planning. Most of the business succession stories covered in the media involve mega-sized family-owned businesses: NFL teams, major chain stores, media empires, huge conglomerates. We’ll get to those later, but first, let’s come back to earth. Most family businesses are small, yet succession planning is as vitally important to that family as it is for the mega business owners.

I can relate to small business owners. I grew up in such a family. In our home, Blum’s Café was like another family member. It was as if my parents had three children: Irwin, me, and the business. Dinner conversation focused on how business was that day. The opening line at the dinner table was always “How was gesheft (Yiddish word for business) today?” Everyone worked in the business.

As is typical, the business started out small. My father opened an industrial restaurant in Fort Worth’s meat-packing district when I was an infant. Growth was slow and organic, often driven by the need for more money.

As my Bar Mitzvah was approaching, my parents wanted to build up a fund to pay for it. How did they do it? They put in a jukebox—5 cents per song! They literally grew my Bar Mitzvah fund one nickel at a time. When my mom called my dad early in the day before she arrived to be cashier, if music wasn’t playing, she’d say: “Julius, go put a nickel in the jukebox and get the music going.” It worked. I had a first-class Bar Mitzvah, and 55 years later I still cherish the memories.

As college was approaching for Irwin and me, my parents were even more ingenious. The meat-packing workers all wore white frock coats, which by day’s end were literally covered in blood. To pay for college, my parents started a frock rental business and installed a laundry. All the area employees started their day in our café to rent a frock (and hopefully buy breakfast while they were at it.) The profits paid for all of our University of Texas expenses, allowing Irwin and me to graduate debt-free.

When a need arose, I learned early on that you go to work to make it happen. Julius Blum trained us: “The only helping hand you need is the one at the end of your own arm.” His other motto was: “If you take care of your business, it’ll take care of you.” I’m a believer.

After college, Irwin joined the business full-time and expanded the café operation into J. Blum Co., a full-blown meat-packing supply business. As I’ve recounted in previous posts, Irwin was running the business single-handedly after my father died and my mother retired. When Irwin died unexpectedly two weeks after his pancreatic cancer diagnosis, our succession solution was mom Elsie. (See post from March 1, 2022 “Business Succession Planning: Not Every Family Has an Elsie.”) My mom emerged from retirement in her mid-80’s to run the business and fully manage the transition.

As an estate planning lawyer, Irwin’s death was a wake-up call for me. I’m now a major advocate for business succession planning. We were fortunate to have Elsie as a business transition solution, but don’t depend on luck. The smarter approach is to have a succession plan in place, ready to activate when the time comes. And as I learned, that time can hit you completely out of the blue.

Marvin E. Blum

Is Someone in Your Family Hurting?

October 4, 2022

Is someone in your family hurting? That’s a provocative question. The fact is, for almost every family, the answer is yes. Furthermore, if someone in a family is hurting, generally the whole family feels it. Try as we may to sweep it under the rug, the issue seeps back into our brain and preoccupies us. As I advocate for Family Legacy Planning and Business Succession Planning, the reality is that such processes are impeded until we address what’s hurting us.

Last week’s post coincided with Rosh Hashonah (the Jewish New Year), ushering in a season of reflection, repentance, and spirituality. As sundown tonight marks the beginning of Yom Kippur (the Day of Atonement), I’ll continue to honor the spirit of this holy season with an “estate planning” lesson from renowned Rabbi Shlomo Farhi of New York. My daughter Lizzy attended Rabbi Farhi’s class on one of the central themes of this season: “T’shuvah” (Hebrew for Repentance, though the actual translation is to “Return”). During these Holy Days, we are challenged to turn around and return to more righteous living. Rabbi Farhi shared this parable: A tightrope walker walked down the rope, turned around, and walked back up the rope. When asked which was harder, walking down or walking up, the tightrope walker answered: “Neither journey was the hardest part; the hardest part was turning around.” When we want to change course from a path we’re on, the hardest part is to turn around. After that, we’ve accomplished the toughest part of the journey.

A few years ago, I had a wakeup call at the Annual Conference for FOX (Family Office Exchange) where I learned that most families are indeed hurting. The agenda included all the expected topics for high-net-worth families engaged in legacy planning: estate planning, tax planning, family governance, family education, investing, money management, philanthropy, etc. But there was one topic on the agenda that surprised me: addiction. The presentation from addiction counselors generated the greatest interest of all. It turns out that almost every family was dealing with addiction at some level, and that hurt dominated the family’s psyche. As an estate planner, I learned the importance of meeting a family in the place where it is. In my journey to practice “holistic” estate planning, I realize the need to recognize when a family is hurting and accommodate that in the estate plan design and process.

An effective estate plan needs to fit the family’s reality. We need to engage in honest conversations and design an inheritance appropriately. Trust provisions need to address that reality. Making trust distributions outright to an impaired person can be poison to that person. Trustees need to be empowered to adjust distributions to take into consideration a beneficiary’s dependency.

With my daughter Lizzy’s permission (indeed, encouragement), I will share our own family’s struggle with addiction. In the summer of 2021, Lizzy began her season of reflection with an honest look in the mirror and bravely recognized her dependence on alcohol. On August 1, 2021, she took the hardest step and turned away from a behavior she wanted to change. We are very grateful and proud that Lizzy is now on a sobriety journey, her last drink now more than 14 months ago. As she walks the tightrope back to a life without alcohol, we all recognize the risks. But, she accomplished the hardest part when she turned around. Her journey is not easy, but she wisely chose a support system to help her stay on course.

Lizzy has been very public about her battle against alcoholism, in hopes it’ll give others the courage to turn around and follow her path. That’s why she urged me to share this message, hoping it’ll reach someone who may need help and hope. (To learn more of Lizzy’s story, follow her on Instagram at @LizzySavetsky.)

The third prong of the Blum family mission statement is spirituality. In this season of spirituality, I feel moved to send encouragement to all families who are hurting. At The Blum Firm, we have cultivated resources who may be able to help. Please reach out to us if you’d like information on counselors or programs that come highly recommended. And please know that we’re here for you, with both “head“ and “heart,” to help you design an inheritance plan that’s best suited to your family.

Marvin E. Blum

What’s Your Unfinished Business?

September 27, 2022

This post is coming to you on the Jewish New Year, Rosh Hashonah, marking the start of the year 5783 in the Hebrew calendar. A central theme during these Holy Days is a call to action, symbolized during our prayer service by the loud blasts of the shofar (ram’s horn). We reenact this ancient ritual to wake us up, literally and figuratively. The sounding of the shofar ushers in the Ten Days of Repentance, culminating on Yom Kippur, the holiest day of the Jewish year.

This theme of a wake-up call brings to mind a sermon I heard recently in New York. Our daughter Lizzy and her family moved back to New York a few weeks ago after a 3-year chapter in Dallas. Laurie and I went to check out their new surroundings, including their new place of worship, the Alt-Neu (Yiddish for “Old-New”) Synagogue. At Shabbat services, Rabbi Benjamin Goldschmidt alerted us that this is the time of year to “get your affairs in order.” When the doctor tells you that, it’s bad news. This time, the warning is coming not from the doctor, but from the Almighty. The rabbi asked us to think about what that phrase means to each of us. He challenged us to ponder the question: “What’s your unfinished business?”

There are so many aspects to this question, but as an estate planning lawyer, having your “affairs in order” brings to my mind the importance of having a Will. If you don’t have a Will, you should. And, if you have one, is it up-to-date?

I’ll share some shocking statistics. It’s been reported that 73% of those who die in Texas each year die without a Will. Even more startling: 46% of high-net-worth parents have not executed a Will.

Most know the reasons a Will is important, but I’ll recap a few highlights:

• You designate who will inherit your assets instead of letting state law direct it.
• You select the person to serve as executor to oversee the passage of your assets.
• If you have minor children, you name the person to serve as guardian of your kids (the most important provision of all).
• If you own a business, the Will addresses who will own your business after you’re gone.

That last point ties into the segment I’m now doing on Business Succession Planning. In the last few weeks, I’ve been spotlighting the need to plan for the transition of your business. There are two different elements to address: (1) ownership of your business and (2) management of your business. Ownership is directed by your Will and/or trusts, where you designate who will own your company after you’re gone. Possibilities include leaving the ownership interests to a trust for your family, controlled by a trustee whom you appoint to be in charge. It can also entail creating voting and non-voting stock, so that control rests in hands you deem best suited. Your plan may include a Buy-Sell Agreement, outlining the terms for a buy-out if a family member exits the business. These concepts deal with who will own the company, but that’s different from who will manage it. In a Business Succession Plan, you also address who will run the business, which may or may not be the same persons as the owners. Business owners need both: a Will to direct who will own the company, and a Business Succession Plan to designate who will manage it.

Every person who is 18 or older needs a Will, otherwise the state has one for you that you may not like. Even if you have a Living Trust, you still need a “Pourover Will” to “pour over” any assets you own at death into the Living Trust. Without a Will, estate administration will be far more cumbersome.

As you heed this wake-up call from the shofar and make your own list of unfinished business, give some thought to whether you have an up-to-date Will. And if you own a business, take the extra step to create a Business Succession Plan. This season of reflection is the perfect time to get your affairs in order.

To one and all, I send the Hebrew greeting “L’Shana Tova” (“To a Good Year”).

Marvin E. Blum

We’re in a “Perfect Storm” for Business Succession Planning

September 20, 2022

As part of the segment I’m doing on Business Succession Planning, I want to share planning tips I recently presented at Bank of America’s Business Owner Conference. It was easy for me to relate to the audience of business owners, as I grew up in a family business. I understand the attachment they feel to their business, and the reluctance to plan for the day they are no longer here to run it. For people who wake up every day with entrepreneurial energy, it’s hard to imagine the day when someone else is in the captain’s chair. But if business succession planning is done carefully, it will address not only the financial aspects of the transition, but also the psychological aspects. Indeed, it’s the psychological aspects that usually produce the greater challenge.

Why is now the “Perfect Storm” for such planning? Ever since the COVID pandemic, I’ve noticed a heightened awareness of our mortality. Many who behaved as if they’ll live forever began to realize that one day they’ll be gone. As I often say, it’s a WHEN, not an IF, you’re no longer here to run the business. And for those who feel “indispensable,” I often respond with the Charles DeGaulle quote: “Cemeteries are full of indispensable people.”

Therefore, now is the time that more and more business owners are seeking advice on planning tools to pass on their business in the most tax-efficient and family-efficient way. To summarize these tools, I prepared a PowerPoint with seven ideas for business owners to consider. Click on this LINK to review my Bank of America presentation.

Business Succession Planning is not a “one size fits all” endeavor. Each family needs to create the structure that’s the right fit. In my speech, I hit the highlights of “squeeze & freeze” planning techniques, such as Defective Grantor Trusts, 678 Trusts, and SLATs. In addition to locking in the doubled estate tax exemption before it sunsets in half (on December 31, 2025—only three years from now), these trusts also protect all future appreciation from the 40% estate tax. Unless you plan around the estate tax hit, the federal government is your 40% silent partner in your business. Passing business ownership into trusts not only saves tax, but it also protects the business from an owner’s creditors and divorce. Moreover, by using trusts to own the business, you can also carefully select the trustee who will oversee the management of the business when you are gone.

In addition to addressing business ownership, management, and taxes, the plan needs to also address family dynamics. A skilled consultant can help the family navigate the process, doing it in a way that strengthens communication among family members and builds trust. As family consultant Tom Rogerson wisely says: “A strong business won’t sustain a family, but a strong family will sustain a business.” You can’t effectively plan for a family business’ continuity without also planning for family continuity. In addition, the family business is typically inextricably woven into the family’s identity. Letting go of a family business leaves a void in a family’s identity. It also leaves a void in the founder’s self-image and can have a profound effect on self-esteem. Therefore, the plan also needs to help the family “fill the gap” when business ownership and/or management changes hands.

A final note: now is the perfect time to start. Those who are waiting until “the time is right” are often caught by life’s surprises. As Tom Rogerson says, “It’s rarely too early to plan, but frequently too late.” Similarly, life insurance producer Todd Healy confirms: “Five years too early is better than five minutes too late.” Healy analogizes to having an antidote already on hand in case you get a snakebite: “If you don’t have a snakebite kit on hand, by the time you get bitten by a snake, it’s already too late.” A word to the wise: don’t wait until the snake bites to have a kit in place.

I will continue to build on all these themes as we delve deeper into the world of business succession planning. Starting next week, we’ll explore real life stories of business-owning families. I look forward to sharing lessons we can learn from those who did it right, as well as those who didn’t.

Marvin E. Blum

Follow Queen Elizabeth’s Example

September 13, 2022

As part of the Business Succession segment in our Family Legacy Planning series, I want to pay tribute to a family business matriarch who died last week, Queen Elizabeth. Yes, Queen Elizabeth was part of a family business: the “Royal Firm,” an enterprise with $28 billion in assets. Queen Elizabeth sets an example to put in place a robust transition plan for the family enterprise.

First and foremost, she trained a successor who stands ready to step into her role. Prince Charles has been groomed all his life to now take over the monarchy as King Charles III. One of the primary elements of a business continuity plan is to select and train a successor. Certainly, the lifelong grooming of Charles is an extreme example, but the key is to identify a successor and become his coach. As we often say in Texas, have him “ride around in the truck” (or in this case, the royal carriage) with you to learn first-hand how to do the job.

The Queen also had a plan in place for her farewell and burial known as “Operation London Bridge.” Including that element in your succession plan is a big gift to the family during the first days of grief. The Queen’s plan was activated by sending Prime Minister Liz Truss the code language: “London Bridge is down.” What followed is an orchestrated series of communications to key contacts, media announcements, and fully planned events. Follow the Queen’s lead and leave instructions for your burial, memorial service, obituary, photos, etc. Making those decisions immediately following a loved one’s death is a heavy challenge. Your family will be grateful for the guidance.

Queen Elizabeth also had a plan in place for her assets. The $28 billion in the Royal Firm stays intact, similar to a trust arrangement, to provide ongoing funds to operate the monarchy and maintain the palaces. In 2022, the Royal Firm provided a Sovereign Grant of approximately $100 million to cover such expenses and maintain her household. Providing your family with a source of funding to sustain your business and legacy assets (whether through life insurance or a reserve fund) is likewise important, even if the amount needed has a few less zeros on it.

The Queen also owned approximately $500 million in personal assets. These assets include some $70 million she inherited in 2002 from the Queen Mother’s paintings, stamp collection, china, jewelry, and horses, as well as the Queen’s investments and real estate. It is reported that most of those personal assets will pass to King Charles III. Questioning whether leaving an unequal inheritance to her children will create issues is a topic I covered in my posts on sibling warfare due to unequal inheritances. (See my posts dated July 19, July 26, and August 2, 2022.) Perhaps in the royal context, King Charles’ siblings will be more understanding (or perhaps not?).

Another element of a thoughtful transition plan is to engage in planning to minimize estate taxes. That’s one aspect where the Queen got off the hook. In 1993, Parliament passed a bill exempting the estate of Queen Elizabeth from paying the 40% inheritance tax. As no one in the U.S. enjoys that benefit (unless they were lucky enough to die in 2010, the one and only year with no federal estate tax), I urge all to implement techniques to minimize the 40% U.S. estate tax. In next week’s post, I’ll address some of those “squeeze & freeze” tools available while we’re still in the Golden Age of estate planning.

Rest in peace, Queen Elizabeth, and our gratitude to you for living an exemplary life, all the way to the end.

Marvin E. Blum

Don’t Be Like HBO’s “Succession’s” Logan Roy: Switch from Quarterback to Coach

September 6, 2022

In last week’s post, we shined a spotlight on the complicated relationship between the family business and the business founder. I frequently describe Business Succession Planning as “the most neglected area of estate planning.” Many founders have a deep emotional attachment to their family businesses. They can’t bear the thought of planning for the day they are no longer running the business. In my own upbringing, the family business was to be nurtured and raised, almost like it was another child in the family. I can still hear my dad Julius Blum’s voice: “If you take care of your business, it’ll take care of you.” Yet with all that love and affection, only one-third of family businesses successfully pass from G-1 (Generation One) to G-2. Even worse, only 10% pass from G-2 to G-3.

Why the low survival rate? The HBO hit “Succession” offers one cause. Billionaire Logan Roy, although in his 80’s, refuses to yield control of his global media empire Waystar Royco to anyone, even his four adult children. Although fictional, the show’s writers drew inspiration from real-life media moguls the Redstones (who control ViacomCBS Inc.) and the Murdochs (who control The Wall Street Journal). It’s hard for the founder to pass down control. But for the health of the business, there comes a time when the patriarch needs to switch from being quarterback to being the coach (in the words of renowned family consultant Matthew Wesley).

Though the “Succession” story may be painful, many business-owning families can relate. If nothing else, it’s instructive on how toxic behavior can destroy a business and a family. The Wall Street Journal covered this topic in “Succession’s Family Business Drama Hits Close to Home for Some Fans” (November 5, 2021). The article describes how the show “pinched nerves every now and then” for Steve Smith, owner of a family architecture firm: “We identified that this is what we don’t want the family to become. The show has put that top-of-mind again and again and again because it’s so addictive to watch.”

“Succession” is even part of the curriculum in a course at Northeastern University called Examining Family Business Through Film. Professor Kimberly Eddleston describes the show as “a case study in how some founders feel entitled to run their companies until they die, and how some potential successors feel unworthy to take over.”

At The Blum Firm, we have witnessed too many real-life dramas on family business succession. Seeing those has caused us to develop “Business Succession Planning” as one of our law firm’s main offerings. There’s no one-size-fits-all solution. Regardless that the solutions are each unique, the process is generally the same. Hence, we created a Ten Step Business Succession Planning Roadmap:

1. Start the Process
2. Create an Action List
3. Form a Planning Team
4. Manage Expectations
5. Identify the Issues
6. Define the Desired Outcomes
7. Search for a Solution
8. Get Buy-In from Key Stakeholders
9. Address the Challenges
10. Implement the Solution

We’ll walk you through the specifics in the coming weeks. Suffice to say that at the end of the process, you’ll identify a solution that fits your business and your family. You’ll improve the odds of preserving the family business as a meaningful legacy for future generations. Our goal is to put you in the category of Alan Rosen, CEO of family cheesecake empire Junior’s Restaurants and Bakery, who fought his senior generation to expand beyond their original one store in Brooklyn. Learning from Logan Roy’s mistakes in “Succession,” Rosen is committed to a smoother business transition: “I, unlike Logan Roy, will have a plan.” The Blum Firm would be honored to help you have a plan, too.

Marvin E. Blum

Business Succession Planning: Every Ending Is a New Beginning

August 30, 2022

One of the toughest challenges in estate planning is to plan for the transition of a business when the founder is gone. There are so many business and financial, as well as psychological and emotional, aspects to consider. That’s the reason most put off doing business succession planning. They just don’t want to open that can. However, as my colleague Tom Rogerson often says: “Failing to plan is planning to fail.” Failing to carefully plan for the continuity of a business often leads to a bad outcome—bad for the owners, bad for the family, bad for the employees, bad for the customers, bad for the suppliers, bad for everyone involved.

Because of the reluctance of business owners to plan for who will run the business WHEN (not IF) they are gone, I am launching a segment of my Family Legacy Planning Series devoted to Business Succession Planning. In the coming weeks, we’ll explore the do’s and don’ts of succession planning. We will study real life examples of families who did it right and families who did it wrong, learning from their successes and their failures.

Interestingly, the idea for this segment on business transition planning came to me when hearing a sermon from Rabbi Zev Weiner. While in Los Angeles to celebrate our granddaughter Juliet’s 8th birthday, we attended Shabbat services at Young Israel Synagogue. I learned that the Gemara (Rabbinic commentary) teaches why Jewish law on divorce comes BEFORE the Jewish law on marriage. Rabbi Weiner explained that all endings (whether it be divorce, death, job termination, or even the end of a month) are viewed in Judaism as new beginnings. Upon any such ending, the focus is to look to the opportunities that lie ahead, opportunities to start over, find happiness, renewal, rebirth. That’s why marriage teachings come AFTER divorce teachings in Jewish law.

It then dawned on me: the death of a business founder brings an opportunity for business continuity, perhaps even improvements, expansion, a better way. It also creates the opportunity for the founder to create a lasting legacy that endures for generations to come. A life ends, but a legacy begins.

By the same token, TV producer Norman Lear recently celebrated his 100th birthday with two words of advice: “over” and “next.” When something is finished, declare it OVER and don’t dwell on it. Immediately move on to what comes NEXT. That philosophy has served Norman Lear well, a man who continually recharges his creative juices and is still working in his 101st year. But when his time is over, someone else will pick up where he left off and bring on what’s next. Similarly, when any business founder’s work is “over,” it’s important to have a plan in place for what comes “next.”

I look forward to diving deep into business succession planning and exploring all the opportunities it offers.

Marvin E. Blum

If You Don’t Document It, It Didn’t Happen

August 23, 2022

My daughter Lizzy has become our family’s historian, taking the lead on photographing the moments of our lives. When anyone objects, she admonishes: “If you don’t document, it didn’t happen.” Lizzy is right about the importance of “documenting” our stories, whether it be in photos, videos, or writings. If we don’t intentionally record our history, one day those treasured memories will vanish.

Documenting your legacy is an important part of the estate planning process. Estate planning is so much more than writing a Will. Estate planning is a reflective process, a time to assess what you want to pass down to your heirs aside from your financial assets. Each of us needs to view ourselves as an ancestor. As an ancestor, the goal is to enrich the lives of our descendants, not by making them “rich” with money, but by making them the recipients of a rich and meaningful legacy.

In his article “Our Legacy,” Blake Amos of Trinity Valley School describes our legacy as “what we leave as a pathway for our kids to follow.” Amos continues: “Our legacy is being created whether we are intentional about it or not…. Our legacy is being created every day, so let’s commit to shaping it with intention, thoughtfulness, and care.” As we do so, Lizzy would add, let’s also document that legacy with intention, thoughtfulness, and care.

In the last two weeks, I’ve described the process of creating a video of my mother Elsie’s life story. The feedback has been heartwarming. A number have requested a sampling of the video that includes her “Southern Belle” accent. Click on this LINK for an updated one-minute teaser video with a couple of quotes in Elsie’s own voice, in particular a snippet where she confesses to being a “flirt” to snag Julius when they first met at a Brandeis camp.

I am now gathering photos to slot into the video, and in doing so, I realize how right Lizzy is to urge us to take pictures. How much I wish there were more photos to aid in visualizing significant places and events. What I am noticing is that an important source of photos often comes from weddings. I’ll put in a plug for investing in excellent wedding photography. Some describe an expensive wedding as “driving a car off a cliff,” as Monday morning comes around fast and it’s all over. Not true. Those wedding memories live on for lifetimes, especially through pictures that future heirs will cherish. We keep a photo album of each of our kids’ weddings on our coffee table, and it’s soothing to peruse them from time to time. There’s even research that proves that looking at family photo albums actually lowers blood pressure.

In addition to documenting your story through audio/visual and photos, it’s also important to prepare a written history. Here are a couple of tips on writing your story:

• Kasia Flanaghan with EverydayLegacies specializes in personal writing coaching and editing to help you write your story.

• Pat Hawkins recommends StoryWorth, a Christmas gift from his kids that provided Pat a question each week to answer in writing, which was then compiled into a book after a year. Quoting a Jesuit priest who said “The shortest distance between two people is a story,” and a friend who said “An untold story is a secret,” Pat concludes: “It’s my hope that reading the stories in this book will shorten the distance between you and me, and that these no-longer-untold stories will help create a family legacy.”

Indeed, documenting those stories through videos, photos, and writings will not only prove that they happened, but will weave together a memorable legacy. Preserving a family legacy can help preserve a family. As you engage in estate planning, remember to document a family legacy as part of that process. Your heirs will look back on you, their ancestor, and thank you.

Marvin E. Blum

Tips to Create Your Life Story

August 16, 2022

I revealed last week that I’ve embarked on a video project to document the history of my mother Elsie, and through her, my ancestors. Today, I’ll share more about the process of creating “The Elsie Blum Story.”

First question: Why do it? I’ve emphasized repeatedly the value of a family knowing its heritage in order to remain connected and thriving for years to come. David Issay, creator of StoryCorps, cites research demonstrating that stories connect and heal us. Families yearn for connection. Retelling family memories helps families continually reconnect. We recently had a Blum cousins’ reunion where we sat around retelling old family stories that we all already knew, but everyone left that lunch feeling a deeper bond to each other. Documenting your life story keeps those golden moments alive for future generations. Bruce Feiler reaffirms: “The single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.”

Next question: How to do it? Technological advances make it easier to document your history. The choices range from books, to audio recordings, to videos, to recorded Zooms, to custom-produced films. Resources continue to emerge, including these options:

• Live On Services – Records a Zoom interview with Ruth Luban prompting you to share treasured memories, traditions, and stories. The extended package incorporates up to 50 photos into the recording.
• Axcelora – Creates a brief audio recording that goes out at death in a link to loved ones.
• Life Stories Company – Helps you write your private memoires and create a Life Legacy Book.
• EverydayLegacies – Records a video/audio history of your family heritage stories.
• Wells Fargo Family & Business History Center – Generates an oral history in your own words and voice.
• Epic Bound Books – Publishes a coffee table book.
• Legacy Commissions Films – Produces a custom family legacy film.

Regardless the route you choose, my advice is to do it now. One reader this week shared: “I wish I knew more about my grandparents’ beginnings and tried to get my mother to tell her stories into a recorder, with no success. I need a kick in the a—to get started.” Well, I’m here to give you that kick, and urge you to engage a service to help make it happen. Many shy away from telling their story. It’s normal to find the process intimidating. When my mom tried to back out, having a third party there to encourage her made all the difference. We worked with Ruth Luban at Live On, who kept the conversation flowing and pulled out some stories from Elsie that I’d never heard. Click on this LINK for a one-minute teaser video of “The Elsie Blum Story.”

Do some advance preparation to make sure you include the most important topics and stories. We used a chronological approach, starting with memories of my mother’s parents and my father’s parents and their escape from oppression to immigrate to America. The focus then shifted to Elsie’s childhood in Montgomery, Alabama during the early Civil Rights movement, followed by marriage to Julius, moving to Fort Worth to raise Irwin and me, to more recent years as a grandmother and great grandmother. The video concludes with inspiring stories of the strength Elsie modeled when she coped with the heartbreaking loss of Julius and Irwin. In her sweet southern accent yet “Steel Magnolia” resolve, Elsie advises future generations to stay strong through adversity and follow her example by clinging to faith, family, and productive work.

I’ll conclude with the words of Ruth Luban in a Live On blog post Preserving Family Heritage: “The fact is, we’re all walking stories, every single one of us. We came into the world with a story on our backs, lifting the life stories of our parents and forbears. Those stories embody traditions, tribes, geopolitical whereabouts, and cultural patterns that inform what our lives will become…. And many people simply don’t realize that their stories actually matter…. Participants have reported how transformative it was to recollect, to attune, to acknowledge their life history…. [That] story is the tapestry within which people thrive.”

I urge you to give your heirs the gift of your life story. It will be a gift that will keep on giving.

Marvin E. Blum

Update on Elsie: Preserving My Mother’s Story

August 9, 2022

Every family has a story. Those stories make your family unique. As psychologist Marshall Duke explains, “Ordinary families can be special because they each have a history no other family has.” In writing this weekly Family Legacy Planning series, I’ve revealed stories about my own heritage, especially the stories of my four grandparents immigrating from Eastern Europe to America to escape persecution against Jews.

Research shows that heirs who know more about their family heritage, especially examples of ancestors’ resilience, have higher self-esteem and are better equipped to handle adversity. The best way to teach younger generations about their heritage is by telling stories. For that reason, I’ve become an active proponent to encourage people to document their stories. If not, these precious family jewels will get lost over the generations.

As I advocate for preserving stories, I’ve become the proverbial cobbler who is now taking care of my own shoes. I am now engaged in a full-blown effort to create “The Elsie Blum Story.” I can’t claim the credit for this idea. The seed for it was actually planted when Sam Daniel sent me the following email after reading of my brother Irwin’s unexpected death from pancreatic cancer at age 65, and how Elsie jumped in at age 85 to take over the family business:

Your weekly stories are now a must-read in my inbox! Your story about Irwin touched me deeply. Now this story about your mother is incredible to read! Elsie is a hell of a woman, and I mean that nicely! I think a wonderful way to honor her legacy is to sit down with her for a series of discussions about the family history. At Elsie’s age, she is a walking, talking wealth of stories and knowledge about your family history. Record her voice speaking about her life, your father’s life, her parents and your father’s parents. I wanted to do this with my mother before she passed, but alas, she developed dementia and was gone in a matter of months. Needless to say, I regret that lost opportunity.

Sam’s email was a wakeup call to record my mother’s voice before dementia or death come along (often unexpectedly) and then it’s too late. I wanted that history to be told in Elsie’s charming “Lady Bird Johnson” deep South accent. Fortunately, Elsie at age 91 is still going strong, and 100% sharp mentally. I teamed up with “Live On” to help create a video history of Elsie’s story. A few days before filming began, my mom expressed some reluctance (a common occurrence). She agreed to proceed on the condition that I sit next to her throughout the filming. Thankfully, we have now completed several hours of recordings, and the evidence is preserved. We now begin the next step of converting that footage into a final product.

In next week’s post, I’ll share more specifics about the process of creating “The Elsie Blum Story” and explore various options for documenting a lasting family history. I’ll also share a one-minute “teaser” video of Elsie’s story.

Elsie update: As the attached photo shows, Elsie has now added “runway model” to her resume, selected by The Stayton to model in their recent fashion show. Though her mind is still completely sharp, after two falls in the last couple of years, she agreed it was time to retire her high heels and use a walker. Some may have too much pride to admit the need for walking assistance, but Elsie is a role model to stand tall, use a walker, and walk with dignity. To anyone who is unsteady, please follow Elsie’s lead and take the safe route. It’s not worth falling.

Marvin E. Blum

Unequal Inheritances: Tips from Experts

August 2, 2022

In last week’s post, I shared a few samples of the high-octane reaction to the topic of sibling strife over unequal inheritances. I brought home the point that such warfare is not exclusive to the mega-rich. Last week’s real-life stories came from families of all levels of wealth.

In today’s post, I want to offer tips I received from other advisors. Like me, they’re in the trenches learning the “do’s” and “don’ts” from seeing inheritances in action, the ones that worked and the that went awry.

From a life insurance advisor:
I wish families could see how dangerous it is to family harmony to try and split things like businesses and land among three and four kids. Obviously, I am biased to the insurance industry as a solution but the creation of cash at death for the purpose of estate division can be a huge key to maintaining the relationships in the family. If people truly realized its power, they would be actively pursuing getting as much life insurance coverage as they can.

From a family counselor/life coach:
Having a third-party mentoring the children to prepare them for what is in their future is a great remedy and it reduces the risk of relational issues. It doesn’t eliminate the risk, but it does reduce it.

From a trust officer:
I am in favor of equal division to avoid family conflict. Another problem we see is pot trusts (a trust for multiple beneficiaries where distributions are made to the individual beneficiaries as needed, and there’s no score-keeping)—nobody is happy if one sibling has more needs than others. It is better to have an estate split into equal separate trusts, with the irresponsible sibling having a corporate trustee and the other siblings serving as their own trustee. That way the siblings understand that each of the siblings received the same amount from the parents’ estates and that everyone’s shares are in trust.

From another trust officer:
Seriously consider naming a corporate trustee, if for no other purpose than to administer the estate before the split and each child can take over their own trust at that point. Naming a corporate trustee to serve for the first few years only can often diminish the tendency of the heirs to go after each other. This is especially effective if the corporate trustee is brought into the conversation with the adult children and it is understood that getting through the estate tax filing, any probate, and the initial winding up of the decedent’s dealings is not only not fun, but it can be exhausting and beyond the capability of heirs. And, by the time each heir hires their own lawyer to represent them as fiduciary (in that scenario no one generally believes their interests are truly aligned, someone always believes the other heir is somehow going to try to take advantage of the situation), it quickly becomes obvious that the corporate fiduciary appointed to just get through the administrative phase of the estate is well worth the cost.

Once the estate distributes to the resulting trusts, the heir can become the sole trustee at that point and can do what they want. They can move the assets from the corporate trustee, or if the corporate trustee has done its job well, retain the relationship as a value-added partner.

Experience has shown me how ugly it can get when mom and dad swore in our conference room “our children definitely get along well, they won’t have any problems.” What is always underestimated is the influence of the siblings’ spouses as well.

From a financial advisor:
Thanks for another important article. I’m observing over time that more and more of my work and of the value that my practice offers to families has to do with developing thoughtful ways to increase family communication and understanding of the hopes and wishes of the parents, as well as their kids. Of course, this then interconnects with every other aspect of the family enterprise from business management to family governance to estate planning to portfolio management.

I couldn’t have said it better myself.

A final tip from me: When parents are debating leaving an unequal inheritance to their kids, I often advise them to consider making unequal distributions to the kids while the parents are alive, without keeping score. However, when it comes to the Will, leave the estate in equal shares. A Will is a permanent document, and having a reminder of inequality out there forever can continue to sting. If kids aren’t equally capable of managing the assets, leave the assets in equal trusts for each child, and carefully select the appropriate trustee to manage each of the trusts. That way, ownership is equal, even if management is not.

There is no “right” or “wrong” answer; no “one size fits all.” The key is to engage in a thoughtful process, seeking guidance from estate planning advisors who bring experience, wisdom, objectivity, “head,” and “heart” to the table. Every family wrestles with its own dynamics. Address the issues; don’t sweep them under the rug. I urge you to consult with experts who are here to help your family build a lasting and meaningful legacy.

Marvin E. Blum

Title: Sibling Warfare: Reader Reactions

July 26, 2022

My Sibling Warfare post on June 28th, together with last week’s post on unequal inheritances, have really struck a nerve. Not surprisingly, many families are struggling with sibling conflict. The feedback I’ve received has been so informative that I’ll share some highlights with you.

The five stories of family feuds in my June 28 post created quite a stir. WealthManagment.com picked up the article and published an edited version here entitled “Five Famous Families Undermined by Sibling Conflict.”

Those five examples illustrate what can happen when sibling rivalry grows into fighting of epic proportions. Although those five families are all mega wealthy, I’m reminded that family infighting is not limited to the ultra-rich. In the feedback, I learned stories of sibling strife in families of moderate means that are equally toxic.

Several stories involved leaving the family home to only one of the kids, for reasons that appeared fair to the parents, yet the news was not well-received by the other kids. Part of the distress was related to financial disparity of the inheritances but much more was due to hurt feelings. In these stories, the prevailing view was for the parents to do their best to explain their reasons, and even if there’s no buy-in from all the children, at least there were no surprises when the Will was read.

Other stories I received involve family businesses left unequally to the kids. Again, the parents had valid reasons for the unequal division, such as leaving more to those active in the business and attempting to make up the difference by leaving other assets to those not active in the business. In one extreme case, the entire business (considered the family’s premier asset) went to one kid and real estate (of much lower value) to the other kid. The one getting the real estate felt slighted, but watch what happened. Fast forward years later and the business was bankrupt while the real estate soared in value.

One mother shared with me an ongoing internal debate over her plan to leave the estate equally to her four children in an effort to preserve family harmony but was concerned about one child being of much lesser means. The mother held a heart-to-heart family meeting to explain her intentions and seek a moral commitment from the children to be there for each other and use the inheritance to support a sibling, if ever needed.

Yet another story involved two siblings, one very responsible and the other terribly irresponsible. Their parents left both halves of the inheritance to identical restrictive trusts in an effort to protect the irresponsible one. The result was that the responsible sibling felt punished for their sibling’s irresponsibleness.

These are all heart-wrenching, real-life examples reminding us there are no perfect answers. As an advisor stressed to me, an estate plan should not be set in stone, as adjustments may be necessary as life unfolds. Estate planning is an art, not a science. Estate planning advisors have a unique perspective and can offer valuable guidance in helping parents address these thorny issues.

In next week’s post, I’ll share some of the valuable insights I received on this topic from life insurance, financial, life coach, and trust advisors. Stay tuned.

Marvin E. Blum

Leaving Unequal Inheritances to Your Kids: Fair or Poison?

July 19, 2022

My post 3 weeks ago on “sibling warfare” generated a hot reaction and a request for me to dive deeper into that topic. I’ll start that today by addressing a controversial topic that often leads to sibling warfare: leaving unequal inheritances to your kids. This topic was the subject of a February 19, 2021 New York Times article by Susan B. Garland titled “The Unequal Inheritance: It Can Work, or It Can ‘Destroy Relationships.’” I have confronted this issue many times in my 44 years as an estate planning lawyer, as clients struggle with the question of “equal vs. fair.” Do I leave my estate equally to my kids, or do a do an unequal division because that would be more fair?

In considering the pros and cons, be aware that this is a bombastic decision. True, equal isn’t always “equitable,” but Garland cautions that “unequal inheritances can trigger sibling fighting after a parent dies. Some feuds end up in court.” Perhaps that’s why, in spite of the many reasons to go unequal, most opt to go with equal. A survey of bequest intentions reported that 93% plan to divide their estate equally among their children, regardless of the children’s financial circumstances. (Source: “Love and Legacy: Are Children’s Affections Related to Parents’ Bequest Intentions?” by Matthew Sommer and HanNa Lim, Journal of Financial Service Professionals, Jan. 2022.)

Even with the overwhelming majority opting for equal inheritances, many parents still wrestle with this decision. Here are 10 reasons parents may leave assets unequally.

1. One child may be struggling financially, while others are well-off.
2. One child provided care to an elderly or ailing parent.
3. One child has kids and the other doesn’t.
4. One child has a disability.
5. One child is responsible financially and the other is a spendthrift.
6. The parents paid for one child’s expensive education or gave them a house.
7. The parents bailed out a financially irresponsible child over the years.
8. It’s a blended family where the relationship with stepchildren vs. biological children isn’t equally strong.
9. Parents leave kids different types of assets, such as a brokerage account to one (that increases in value) and a house to another (that declines).
10. You love your grandchildren equally and set aside a portion of the estate to go per capita to grandkids, even if one child has 2 kids and the other has 4.

In the final analysis, if you’re going to leave assets unequally, family counselors urge making an effort to get buy-in from all the kids. Garland quotes Arline Kardasis of Elder Decisions: “To head off sibling strife, parents should explain their decision to each child individually or as a group, or even seek mediation.” As do many others, I’m always eager for a dose of wisdom from Warren Buffett and his Vice Chairman Charlie Munger. My family and I attend the Berkshire-Hathaway annual meeting each year, and when I asked Buffett and Munger to share their views on inheritances, Buffett concurred with the notion of going for buy-in: “There may be circumstances where one child has much more of an interest in one type of an asset or another, and you want to make sure your definition of equality in terms of handling different kinds of assets meshes or at least is understood by the children so they don’t think that you gave a farm or a house or something of that sort that resulted in inequality when you thought it was equality.” On the other hand, Buffett’s 98-year-old sidekick Munger was more circumspect. Sharing the concern of many who steer away from unequal inheritance, Munger (a man known for his directness and brevity) said simply: “If you’re going to treat them unequally, that is poison.” (Click on this link for an article sharing my reactions to the 2022 Berkshire-Hathaway Annual Meeting.

Garland sums up the risk: “No matter what the parents’ reasoning may be for leaving unequal bequests, experts advise that they understand how such a decision can hurt the people they care about most.” She quotes Harry Margolis, an estate lawyer in Boston: “Inheritances are often seen as a proxy for love. It’s hard to give unequal amounts and not have a child feel that Mom loved me less or more. Even an investment banker who doesn’t need the money has feelings.” Bottom line: If you’re going down the unequal path, proceed with caution. You may be laying the groundwork for sibling warfare.

Marvin E. Blum

MCA Is a Cause That Makes My Heart Sing. What’s Yours?

July 12, 2022

Our recent Family Legacy Planning posts have stressed the importance of relationships and social interaction in improving the quality and quantity of our lives. Developing that theme further, I think of the various communities we belong to and how those interactions benefit us. We all belong to a number of communities: family, friends, work, church/synagogue, clubs, civic groups, etc. Today, I want to focus on the many benefits of civic engagement. One benefit is that it provides us a community, as we build relationships with an organization’s volunteers and staff. That, in and of itself, is enriching. But civic involvement provides us with so much more.

I’ve emphasized before how author Jay Hughes teaches that wealth comes in multiple forms—Financial Capital being just one of five. The other four are Human Capital, Intellectual Capital, Social Capital, and Spiritual Capital. Civic engagement runs across all of these capitals, but in particular Social Capital is where we give our time, talent, and treasure to society, building relationships in the communities where we live, while also providing the family with a life of meaning. Author Chaim Potok challenges us in The Chosen to live a life with meaning: “It is hard work to live a life with meaning.” Civic involvement provides a pathway to live such a life.

Over the years, I’m grateful for the numerous causes where I’ve had the opportunity to serve. Most have to do with the arts and education, especially those providing opportunities for young people to thrive. Chief among these have been Trinity Valley School, Fort Worth Symphony, Texas Cultural Trust, B-Sharp Youth Music Program, along with my school and religious affiliations. But one that is really grabbing my heart, and the focus of today’s post, is The Multicultural Alliance (“MCA,” formerly the National Council of Christians and Jews, “NCCJ”). This organization started in Fort Worth in 1951, and I’ve been actively involved for over 30 years. I’m now in my third stint of serving as MCA’s Presiding Chair. Over these 70+ years, the mission has stayed the same: to fight bias, bigotry, and hate while working to build inclusive communities. It’s important work, but never has it been as important as it is now. Today, more than ever, we need MCA to break down barriers that separate us and bring people together.

We are living in turbulent times. The rise in hate crimes is beyond tragic. Earlier this year, our own community experienced the horror of a terrorist taking members of Colleyville’s Beth Israel Synagogue hostage. The hostages were saved by the heroic bravery of Rabbi Charlie Cytron-Walker. Rabbi Charlie’s wife Adena served as MCA’s Vice President of Programming for the last 15 years. So this terrorist act hit home. Rabbi Charlie is a member of our close-knit MCA family.

Under the superb leadership of our President Dr. Cheryl Kimberling, MCA sponsors numerous programs to educate us, opening hearts and minds. One of our signature programs is Camp CommUNITY (formerly Camp Anytown), where high school students from diverse backgrounds undergo a transformative experience over five days. Campers return home with a newfound acceptance of others, no longer seeing differences as something to fear, but rather as something to embrace. Given that our world has become more divided than ever, now is MCA’s time. MCA builds bridges of understanding to bring us back together. My daughter Lizzy was a camper and later a counselor, and I served as an adult advisor, and the experience was life changing for both of us.

(In 2016, I was honored and humbled to receive MCA’s Annual Award at that year’s MCA Awards Dinner. To learn more about my passion for MCA, click here to read my acceptance speech.)

I share all of this to encourage others to find a cause that (in the words of Lady Bird Johnson) “makes your heart sing.” MCA does that for me. Furthermore, MCA operates on a very limited budget, so every donation truly moves the needle. In selecting a cause to support, it adds to the satisfaction if you know you’re doing something that directly impacts and advances an important mission.

As I advocate for Family Legacy Planning, I cannot overstress the benefits of civic engagement. The Blum Firm specializes in helping families incorporate into the estate plan a charitable structure that’s right for you. Philanthropy (whether it be your time, your talent, your treasure, or all three) is a laboratory for building a legacy. A family coming together to support meaningful causes creates powerful family glue. It brings generations together, fostering family communication and trust. Siblings and cousins develop group decision-making skills. Philanthropy strengthens the family’s Social Capital and builds deeper connections among family members. Not everyone in a family can work in a family business, but everyone can play a role in family philanthropy. Civic activity not only benefits the community, but the family who does it gets back considerably more than it gives. It’s truly a “win-win.”

Marvin E. Blum

Procrastinating Planning? Heed this Warning from “Ray Ray”

July 5, 2022

For those of us who are putting off something until “tomorrow,” I recently had a wake-up call to remind us that time is zooming by faster than we realize. The wake-up jolt happened as my daughter’s family was packing for their move from Dallas back to New York. The story centers around my oldest grandchild Stella (age 9) and her little baby doll (or “lovey”) that she named “Ray Ray.” (Warning: You may want to have a Kleenex handy.)

Like most little kids, Stella became attached to Ray Ray as an infant. It’s common for kids to cling to a comfort object like a blankie, stuffed animal, or other soft object. It provides them security, especially at bedtime or when adjusting to a new situation. Stella took Ray Ray everywhere, and cared for her as if she were her own little baby. We all understood how much Ray Ray meant to Stella. Once when Stella dropped Ray Ray from her stroller on an evening walk, I retraced our steps with a flashlight and found Ray Ray on the street, thankfully before a car ran over her. Another time, when movers were packing Stella’s family for a move from New York to Dallas three years ago, they accidentally packed Ray Ray in a box. It was weeks before Stella and Ray Ray were reunited, and it was quite a heartwarming reunion to witness. I knew the day would come when Stella would move on from Ray Ray, but I wasn’t prepared for how it would affect me. That day came a couple of weeks ago, and I’m still fighting back tears.

Packing for this move, we were determined to avoid the mistake of Ray Ray winding up again in a moving box. When we gathered Ray Ray and other items to keep separate, Stella announced this gut-punch: “I don’t need Ray Ray anymore. I don’t care if you bring her with us.” All of a sudden, I felt the swift passage of time. I didn’t feel any older, but in a flash, Stella was no longer a little girl. It called to mind lyrics from Babes in Toyland that always gets to me: “Toyland, toyland, little girl and boy land…. Once you pass its borders, you can ne’er return again.” Time marches on; it doesn’t wait till we’re ready.

Here’s my takeaway: For all those things we’re putting off till the future (whether something we need to do or a joy we’re postponing), the future is now. Time flies, and as we get older, it speeds up even more. As Chaim Potok alerted us in The Chosen, in the big scheme of things, a lifetime is no more than “the blink of an eye.” The key is to fill that blink with meaning. My wife Laurie’s grandfather Albert Herzberg said to do that, you have to be intentional. He lived by a “three a day” motto: Before his head hit the pillow at night, he required himself to do three “good turns” each day. Laurie’s mother Aimee Kriger lived by that motto too. It’s hard to do, but it certainly adds up to a life filled with meaning.

Is there something you’re putting off? Estate Planning? Red File? Legacy Letter? Business Succession Planning? Family Meeting? Stella reminds us that time is sweeping by faster than we think.

I can hear Tevye & Golde in “Fiddler on the Roof,” singing at their daughter’s wedding:

“Is this the little girl I carried?
Is this the little boy at play?
I don’t remember growing older,
When did they?…

Sunrise, sunset. Sunrise, sunset,
Swiftly fly the years.
One season following another,
Laden with happiness and tears.”

Now where’s that Kleenex?

Marvin E. Blum

Sibling Warfare: Let’s Battle This Epidemic

June 28, 2022

It seems every day the media is reporting on another family falling off the rails. One sibling is suing another. A couple of weeks ago, I wrote about Rabbi Danziger’s words when Laurie and I were exchanging wedding vows, and that message applies here. When conflict erupts, step back and remember that we don’t all see things the same way. Try to respect the viewpoints of others, listen more, and be thankful for the variety of spices in the Havdalah spice box. The world is sweeter because it’s a blend of different spices. But look, I’m not naïve. Rabbi Danziger’s words worked for Laurie and me. But when siblings are on the brink of war, it takes more than a spice box to resolve it. Let’s explore that.

Every family struggles with conflict. Sibling rivalry is the norm. Our own two kids come from the same gene pool and had the same upbringing, but in so many ways they’re as different as day and night. Probably every parent can relate. When they were little, Adam and Lizzy were always sparring. Laurie and I couldn’t do anything to stop it. I felt better when our wise family friend Jack Belz told us to just embrace it: “They’re developing valuable negotiation skills that will serve them well in life.” Laurie’s sister Diane Wilen, Ph.D. psychologist, comforted us too: “That behavior is developmentally appropriate.”

Yet when kids get older and the fighting gets to epic proportions, that’s another story. The typical response is to try to sweep it under the rug. It’s risky to open that can of worms. Maybe if we ignore it, it’ll go away. News flash: The conflict doesn’t go away. It festers. Eventually, if not addressed, the volcano erupts. Vesuvius often explodes after Generation One (especially the matriarch) is gone. Consider what happened in these five cases that all received widespread media attention.

1. Barclay: British billionaire twins Frederick and David Barclay owned the Ritz Hotel near Buckingham Palace. Frederick and his daughter Amanda were having private conversations to explore the sale of the hotel, but video footage caught David’s son installing a bug in Frederick’s chair. Brother David’s family captured 1,000 separate conversations Frederick had with prospective buyers, lawyers, bankers, and trustees. Frederick sued David’s family for this “commercial espionage on a vast scale,” alleging that David’s sons were trying to freeze out their cousin Amanda. “The Barclays need to remember that 60% of family business failure is because of a lack of open communication and trust. Without rebuilding this, all their businesses, a large part of the family wealth, and the family bonds themselves, will be gone.
2. Feil: New York real estate mogul Louis Feil left his $7 billion dynasty to his four children (one son Jeffrey and three daughters) in equal shares. Jeffrey ran the business and received a sizable salary, but distributed just $300,000 per year to his sisters. The three sisters sued, alleging that Jeffrey was starving them out so he could buy them out at a discounted price. The family lost its glue when the parents died. According to Jeffrey, when his father died, “the binding of the book came loose,” and when mother Gertrude later died, “the pages fell out.” A better succession plan would have provided a substantial cash flow for all four business owners.
3. Angelos: Louis Angelos filed suit against his brother John, alleging John manipulated the family to take control of Baltimore Orioles baseball team and the rest of the family fortune. “Louis Angelos’ lawsuit depicts his brother as manipulating, misleading and intimidating their mother to gain more power over the family fortune. In one instance, when Louis Angelos asks her why she puts up with John’s abuse. She allegedly replied, ‘He’ll go ballistic.’ ” Those are some ugly family dynamics.
4. Spanos: After the death of their parents, two of the four Spanos children were named as co-trustees of a family trust owning a substantial part of the Los Angeles Chargers football team. Sister Dea filed suit seeking removal of brother Dean as a co-trustee. Dea contends that Dean’s decision to move the Chargers to Los Angeles from San Diego was financially ruinous. She also alleges Dean breached fiduciary duties by diverting $105 million of trust funds to various debts, and borrowing $60 million “for the wasteful purchase of an airplane for Dean’s and Michael’s use that has no legitimate business justification.” Siblings Michael and Alexis are siding with brother Dean, “united in support of our parents’ and grandparents’ wishes.” A key takeaway: When creating trusts, select fiduciaries very carefully, and be especially cautious not to pit siblings against each other as co-trustees.
5. Briscoe: Former Texas Governor Dolph Briscoe’s goal was to keep his 600,000 acre ranch in the family long after his death, to be shared equally by his three children. Oldest daughter Janey died in 2018 leaving no heirs, and now the surviving siblings Cele and Chip are fighting in Uvalde County court over how to divide up Janey’s portion of the family fortune. Cele and her kids accuse Chip “of manipulating his frail older sister into signing documents that disinherited them from her estate, tilting control of the Briscoe ranching fortune to him and his two sons in contravention of their grandfather’s wishes.” Chip contends that Cele “drifted away from the family business after moving to Dallas and marrying into a dynasty with a fortune of its own” and is “using the litigation to force a breakup of the family holdings.” Governor Briscoe must be rolling over in his grave. It’s unfortunate he didn’t structure his estate plan to leave his estate to a dynasty trust, instead of relying on the hope that heirs would abide by his wishes to keep the ranch intact.

These are but five examples; there are countless more. The mistakes made in each of the five above cases provide some guidance on what not to do. Create a thoughtful trust structure that reflects the family’s mission and values. Select fiduciaries carefully and avoid pitting siblings against each other. Hold family meetings with exercises to improve communication and trust. Ideally, conduct such activities while Generation One is still around to provide influence and family glue. Consultant Matthew Wesley asks heirs to make a “moral commitment” that they’ll never sue each other. Seek a more collaborative and private resolution. Similarly, author Mitzi Purdue’s family indoctrinates heirs early on that “quarrels stay in the family”–don’t air your dirty laundry in the courtroom. Don’t try to go it alone. There are excellent consultants who can help your family. Laurie and I have engaged them to great success in our own family.

I don’t claim to have all the answers, but this I do know. Don’t ignore the problem of sibling strife. It will come back to haunt your family.

Marvin E. Blum

Sources

1. Barclay: Ellen Milligan, “Bugging the Ritz, Private Investigators and Billionaires at War,” Bloomberg (www.Bloomberg.com), May 20, 2020.
2. Feil: Sarah Rose and Peter Grant, “Real Estate Family Wars With Itself: Feil Siblings Grapple with Empire Created by Their Father,” The Wall Street Journal, September 2, 2013.
3. Angelos: Jeff Barker and Jean Marbella, “Five Angelos Family and Orioles Secrets Brought to Light in Brother’s Lawsuit,” The Baltimore Sun, June 10, 2022.
4. Spanos: Adam Schefter and Kimberley Martin, “Dean Spanos Sued by Sister, Accused of ‘Misogynistic’ Behavior as Legal Battle Continues Over Control of Los Angeles Chargers,” ESPN (www.ESPN.com), June 10, 2022.
5. Briscoe: Laura Kusisto and Anne Tergesen, “Squabbling Heirs Rock Former Texas Governor’s Ranching Empire,” The Wall Street Journal, January 14, 2022.

You Want to Stay in Your Home Forever? Consider Elsie Blum’s Alternative

June 21, 2022

In last week’s Family Legacy Planning post, I presented the case that social interaction improves both the quality and quantity of life. I ended by saying this week’s post would tell my own mother’s story. This email describes the journey of Elsie Blum increasing her social interaction at age 90, and the positive impact on both her and on the rest of the family.

Here is the dilemma many adult children in my shoes face: an elderly parent is living alone in their own home and fiercely wants to stay there. However, their quality of life is declining. They may need health care. The house requires constant maintenance and repair. They are alone and often lonely. Such is the Elsie Blum saga, a story with lots of trials and tribulations, but fortunately a very happy ending. I share this story with the hope it may help others in a similar situation.

After my father died in 2003, my mom began hanging out with some new girlfriends and poured herself into daily volunteering at our synagogue. She was healthy, busy, independent and life was good. Then, 3 years ago, she fell and broke her pelvis. The one-year recovery process was excruciating. She insisted on returning from the rehab facility to her multi-level home where we installed chairlifts on the stairs and lots of handicap bars. We hired round-the-clock care, which was a very unsatisfying solution. No one was happy. But she recovered and regained her independence. Then, a year ago, she fell in her kitchen and broke her hip. Same song, second verse. Once again, she wanted to return from the rehab facility to her home. This time, we were determined to find a different solution.

I struggled with telling her what she didn’t want to hear. Then, the words of my sister-in-law Lea Ann (wife of my deceased brother Irwin) made all the difference. She said, “If Irwin were here, he’d just make arrangements for Elsie to move to a community living environment, and it’d be done!” Irwin was a “can do—get it done” kind of guy. We were both deeply devoted to my mom, but my style was different—I wanted to go all lengths to try to please my mother. My wife Laurie instantly agreed with Lea Ann, and when my mom told us to find full-time care so she could go home, Laurie told her, “We’re not going to do that. We tried that before, and it didn’t work.” Elsie objected, but instantly replied: “Well, if I’m not going to live at home, then I’m going to live at The Stayton.”

We had been trying for years to get my mom to move to The Stayton, a luxury high-rise independent living environment with great food and activities. She had refused to even go look at it. In her mind, it was a “nursing home.” It’s SO not a nursing home. It’s more like walking into a Ritz Carlton Hotel. When she opened the door to the idea of moving there, we jumped on it instantly. The very next morning, we arranged for Laurie, Lea Ann, and me to tour The Stayton, meeting my mother’s decorator Brad Alford there to help us select a residence. As we were leaving her rehab room, she cautioned me not to commit to anything. Hearing Lea Ann’s words in my head, I answered: “This is Irwin Blum talking now. If we find the right place, we’re going to lock it in. I don’t want to take the risk of losing it.” We went to Stayton, and all the while there, I was channeling my brother Irwin.

We found the perfect apartment. Brad Alford decorated it to become a showplace, truly breathtakingly beautiful. The first couple of days were rocky, as Elsie was not a happy camper. That all changed by day 3, when she began meeting the other residents. She marveled at how friendly everyone there was. That was about one year ago. Since that day, my mom has never dined alone. Every day is filled with meaningful activities—programs, concerts, lectures, even Stayton business meetings (which she especially loves, given her head for business). She’s part of a loving and close-knit community. Her face looks younger and relaxed. No more home maintenance. No more loneliness. I mean it when I say she actually seems happier than I’ve ever seen her in my whole life. She has peace of mind, and so do we.

My mom lives in the independent living section, but if ever needed there’s assisted living, skilled nursing, rehabilitation, and also memory care. Thankfully, at 91, she’s going strong and has no need at this time for those other areas. (Please G-d, I hope I have those genes—there’s at least a 50% chance!) I’m convinced The Stayton is adding years to her life, and not just more years, but quality years. I suspect Elsie would say she wished she’d moved to The Stayton ten years ago. We can’t wind the clock back. But as family therapist Brad Nowlin (whose mom Sallie and her husband Joe also live at The Stayton) wisely posited: “When’s the best time to plant a tree? Twenty years ago. When’s the next best time? Now.” We just planted a tree.

The moral to this story: Although many elderly desperately cling to the idea of staying in their own home for the rest of their life, there’s very likely a better solution. They just don’t know it. Elsie would be happy to talk to them.

Marvin E. Blum

Ten Keys to a Long (and Good) Life

June 14, 2022

In today’s post, I continue exploring the first part of the Blum Family Mission Statement: “It’s all about relationships.” In my research on the value of relationships, I discovered a powerful connection between relationships and longevity. It comes as no shock that interpersonal connections improve both the quantity and quality of life, but what does shock me is how high social interaction falls on the list of top reasons for longevity.

By and large, The Blum Firm’s client base beats the life expectancy lottery. We want to help our clients enjoy a positive senior experience. Legacy planning is not just about improving the quality of life for your heirs, but also about enriching your own life experience. To that end, we engage actively in aspects of “Elder Law,” a label that didn’t exist when I started my law practice. With our Red File checklist, we encourage clients to provide instructions on their care in case of incapacity—not just where they want to live or who will be the caregivers, but also favorite foods, TV shows, colors, etc. We promote planning to avoid guardianship, encouraging the use of financial and medical powers of attorney. We also provide expertise to help protect clients from the tragic epidemic of elder financial abuse, whether from con artists, caregivers, and even family members who prey on the elderly. Our mission is to help clients improve not only the length of their days, but also the quality of those days.

There are certain factors that contribute to long life that are beyond your control, such as genetics. But there are many actions that are within your control. Julianne Holt-Lunstad is a researcher at Brigham Young University who studied tens of thousands of middle-aged people. She examined their lifestyle: their diet, their exercise, their medical status, how often they went to the doctor, whether they smoked or drank, etc. After seven years, she and her colleagues reported their findings. Psychologist Susan Pinker also reports on such research in her 2017 Ted Talk entitled “The Secret to Living Longer May Be Your Social Life.” Here, in descending order of importance, are the top ten contributors to living longer:

10. Clean air
9. Hypertension medication
8. Staying lean
7. Exercise
6. Cardiac rehab
5. Flu vaccine
4. Quit drinking
3. Quit Smoking
2. Close relationships
1. Social integration.

According to Pinker, “face-to-face contact releases neurotransmitters that foster trust, reduce stress, kill pain, and induce pleasure.” She distinguishes between in-person and digital interaction, as the greater benefit comes from interacting in person with people as you move through your day. Social integration doesn’t have to be a close friend. It can be the conversation with a mailman. For years, my wife Laurie delivered Meals on Wheels and had meaningful visits with her “clients” as she brought meals into their homes. She was told countless times from both her clients and their family members what a difference that visit made in the day.

Bottom line: Close personal relationships and face-to-face interactions are the top two keys to living both a long and a good life. In next week’s post, I will apply this proposition to my own mother’s situation. Watch for how Elsie Blum, at age 90, improved her life by moving to a wonderful senior living community at The Stayton in Fort Worth.

Marvin E. Blum

It’s All About Relationships: My Best Friend, Talmage Boston

June 7, 2022

A few weeks ago, I dedicated a post to the first prong of the Blum Family Mission Statement: “It’s All About Relationships.” I dedicated the post to my fellow Canoe Brothers, a brotherhood rooted in our shared UT law school experience. Today, I want to single out one of such Canoe Brothers, my best friend Talmage Boston. Our connection was forged by sharing a law school experience and all the times together thereafter. This weekend, Talmage is being honored in Houston by the Texas Bar Foundation, receiving the coveted Dan Rugeley Price Memorial Award for his leadership in the legal profession and his writing talents. The Canoe Brothers will be there to cheer for Brother Talmage, who has been a role model to many, but especially to me. My friendship with Talmage has enriched my life immeasurably.

I first met Talmage at our college dorm Dobie Center on The University of Texas campus. We had a lot in common: each of us a dedicated student, solidly committed to family, faith, and friends. Yet in other ways, Talmage was light years ahead of me—outgoing, confident, athletic. Those were the days of the Vietnam war and Watergate, and Talmage was politically outspoken as Chair of the Texas Union Ideas & Issues Committee. He even ran for UT Student Body President and almost won (beat out by the first female to serve in that role). In my view, Talmage was the proverbial “Big Man on Campus.”

In our senior year, Talmage approached me with the idea of becoming roommates the following year at UT Law School. I was honored and flattered. I deliberated a bit, as I’d never had a roommate (other than my brother Irwin), and there was also the subject of religion. All of my Jewish friends lived with other Jewish people. It was natural for young Jews to stick together, as the Jewish connection is powerful both religiously and culturally. My close friend Karen Cortell (now Reisman) even raised the question: “Marvin, what about the fact Talmage isn’t Jewish?” I knew Talmage had many Jewish friends and respected people of all backgrounds. I decided to take the risk.

(Of course, there was the time I brought my week of kosher food for Passover, along with a kosher skillet to warm it in, and came home to discover pork chops being fried in it. Let’s describe that as a “teachable moment.” I cherish the memory.)

Talmage opened me up to a world outside the classroom. My social life soared, even joining with Talmage to throw some pretty spirited parties (the themes of two of them—“Africa” and “Mexico”—conjure up some crazy memories). Talmage looped me into his friendships with campus leaders and later with national political, literary, and sports heros, such as the late, great Bobby Brown. Talmage taught me to have the courage to seek anything you want. (“The worst they can say is ‘no’.”) He even gave me the determination to go after Laurie, the girl of my dreams, and joined me on a trip to London to “run into” Laurie and her family and convince her to marry me. (It worked!) That’s true friendship.

Through continued shared experiences, my 50-year friendship with Talmage just keeps growing. Talmage encourages me to continually grow and reinvent myself. In that regard, Talmage as an accomplished speaker and author of several books is a true role model. He champions my painting and my writing, urging me to write a book on Family Legacy Planning. (Maybe someday?)

I’m still Marvin and he’s still Talmage, but we’ve been a great influence on each other in ways both profound and whimsical. He even has me joining him to sing my heart out at outdoor concerts. Talmage is good. I’m not, but he taught me “who cares?” One such night in song was at a concert of Eagles songs, and the title of their hit “Take It to the Limit” fits Talmage to a T! All of us who know and love Talmage would agree he lives life by “taking it to the limit.”

I urge everyone to find a friend who stretches you and completes you, the way Talmage fills in the gaps for me. Talmage recently sent the Canoe Brothers a quote of Ralph Waldo Emerson from FDR’s January 1945 inaugural address: “The only way to have a friend is to be one.” The search for friendship requires each of us to make an investment. The more we invest, the greater the ROI (return on investment). Invest in a relationship with someone who brings out your best and challenges you to grow.

I’ll close with the two ending stanzas in Henry David Thoreau’s poem “Friendship,” which so aptly depicts the intertwined roots of my friendship with Talmage.

Two sturdy oaks I mean, which side by side,
Withstand the winter’s storm,
And spite of wind and tide,
Grow up the meadow’s pride,
For both are strong

Above they barely touch, but undermined
Down to their deepest source,
Admiring you shall find
Their roots are intertwined
Insep’rably.

Marvin E. Blum

Family Friction? Be Thankful for the Variety of Spices

May 31, 2022

Last week’s post focused on the polarization in government and the impact on tax law. Each side stakes out its position and tries to force its views on the other side. Even when there’s plenty of common ground, no consensus emerges. Witness this week’s renewed debate over gun legislation. There is no spirit of compromise—it’s all or nothing. If you can force together 51 Senate votes, it’s “all.” If you can’t, it’s “nothing.” This dysfunction isn’t limited to government. Such partisanship behavior also spills over into families.

I wrote recently that 2022 is the “Year of the Wedding” after so many COVID wedding postponements. Marriage creates a perfect storm for polarization. I know firsthand. Laurie and I are a match made in heaven, but even we had our share of tension 43 years ago as we joined together in holy matrimony.

Laurie and I each came from spiritual homes with a strong Jewish identity, but different practices and traditions. Our situation is certainly not unique. The tendency is to cling to how your family did it as the “right” way—the perfect recipe for “I’m right” and “You’re wrong” behavior. I shared this struggle with Rabbi Harry Danziger who officiated at our wedding. While we were standing under the chuppah exchanging vows, Rabbi Danziger provided an eloquent solution.

Our wedding was on a Saturday night after the ceremony of “Havdalah” marking the “separation” between Shabbat and a return to the ordinary work week. The sabbath endows us with a higher soul, symbolized in the Havdalah service by savoring the fragrance of a mixture of spices in a spice box. In a subtle reference to our different viewpoints, Rabbi Danziger urged us to celebrate those differences by recalling the Hebrew spice box prayer: “We thank G-d for the variety of spices.” The world is a sweeter place because we each bring to it our own spices: our own experiences, beliefs, traditions, and customs. I began to see our differences as a spice box that could blend into a sweeter aroma. Indeed, that’s the home Laurie and I created, where we blended our upbringings in a way that created a spiritual Jewish home that’s right for us.

In his article in The Atlantic “A Gentler, Better Way to Change Minds,” Arthur Brooks offers these tips on building consensus:

• View those who disagree with you as valued voices, worthy of respect and attention. Go out of your way to welcome them into your circle.
• Don’t take rejection personally. You can love someone with whom you disagree.
• Listen more. When it comes to changing someone’s mind, listening is more powerful than talking.
• Cultivate openness, non-discrimination, and non-attachment to views in order to transform others. For your values to truly be a gift to others, you must first weaken (though not abandon) your own belief attachments.

I’ll add one more tip to this list. Ancient Greek Stoics saw conflicting viewpoints in a positive light. The Daily Stoic Life teaches the value of being part of a Scipionic Circle, surrounding ourselves with peers who see things differently and stretch our minds. “If you’re not exposing yourself to new ideas, how will you get better?… If you’re not being challenged, how can you become wise?” Adopt a new perspective on conflict. Don’t dodge it, embrace it. Families who look at conflicting beliefs through this lens can build mutual respect, find common ground, reach consensus, and emerge with a sweeter spice box of honored viewpoints.

Marvin E. Blum

Tax Planning in the Age of Dysfunctional Government

May 24, 2022

I have a great love for teaching. It brings me joy to share my knowledge of estate planning and help families achieve multi-generational success. One such opportunity was last week, when I spoke in Tyler at the Texas Society of CPAs East Texas Expo.

At the start of my speech, it occurred to me that my last speech in Tyler was in November 2016, the morning after election day. I woke up that morning to the news that Donald Trump defeated Hillary Clinton. As I drove to Tyler, I was processing the impact of that outcome on tax planning. My whole speech changed.

Regardless of your political views, it’s indisputable that Trump’s election ushered in an era of polarization and partisanship. Early in the Trump presidency, the 2017 Tax Cuts and Jobs Act became law, passing without one Democrat vote. We entered a world where bipartisan support of legislation became more and more rare.

We are now in an age where the pendulum swings far right, then far left, back and forth, continuously over-correcting. Gone are the days when the pendulum hovered in the moderate zone near the middle of the curve. The problem is exacerbated by the primary system for selecting nominees, an electoral process that tends to favor extreme left and extreme right candidates.

In this age of extremism, tax law has become a ping pong ball. Each side uses tax law to advance its agenda. The result is an ever-changing tax landscape. We never know what’s coming.

But, we do know what the tax law is today. As tax law changes, Congress almost always grandfathers planning completed before the new law passes. My message in Tyler was this: take advantage of planning opportunities we have today while we’re still in the “Golden Age of Estate Planning.” To review my planning recommendations, click here for my presentation Last Chance Tax Planning: The Golden Age of Estate Planning Won’t Last Forever (If You’re Not Doing Estate Planning Now, What Are You Waiting For?).

In next week’s Family Legacy Planning email post, I’ll address how the dysfunction that’s happening in government is also happening in families. In my mission to help families heal and prosper, I’ll offer some insights and tips on building consensus.

Marvin E. Blum

A Favorite Annual Experience in Our Family

May 17, 2022

In last week’s Family Legacy Planning post, I shared that the first prong in the Blum Family Mission Statement is Relationships. It takes work to build solid relationships. They don’t come together unless each party invests 3 T’s: Time, Transparency, Truth, all of which leads to the critical fourth T: Trust.

I quoted Malcolm Gladwell for the proposition that relationships and shared values grow out of shared experiences. To repeat Gladwell’s wisdom: “You can’t share values with others until you share meaningful experiences with them…; the relationship, trust and friendship has been shared through the experiences first.” Therefore, for families and friends to build trusting relationships, they must share meaningful experiences. I urge all families to create traditions for heirs to spend meaningful time together, keeping the family connected long after the matriarch and patriarch are gone.

I also encourage families to endow those experiences in the estate plan, so the funds will be there to cover the cost. In past posts, I quoted Mitzi Purdue who credits her ancestors for setting up a trust to cover the cost of family reunions (every 12 months on the Sheraton side of the family with more lavish trips, and every 18 months on the Purdue side of the family with more modest trips). Purdue asserts that those trips are the single biggest reason both sides of her family have remained connected over the years, as well as the single biggest reason their family business continues to thrive.

In thinking about the close connectedness of my wife Laurie’s family, I realize those strong relationships are no accident. Four Kriger sisters grew up in Memphis but now live in various states, and the next generation has spread out across the country even more. However, the Kriger family is intentional about regular family gatherings. These gatherings are a tribute to their deceased parents, who made it clear that family closeness was a top priority. One of those traditions is an annual family trip to Omaha to attend the Berkshire-Hathaway annual meeting. It’s an important ritual that has been continuing for over a decade.

After a two-year break due to COVID, it was good to be in Omaha again for this year’s annual meeting. People are always curious about our takeaways from Warren Buffett and Charlie Munger, who entertain the crowd of some 30,000 Berkshire groupies with their wit and wisdom, answering questions all day with only a one-hour lunch break. Buffett (age 91) and Munger (age 98) are an inspiration. At their advanced ages, there is no sign of mental slippage. They are role models for us to always keep our brains active and never quit learning.

Two times in the past, I was fortunate to be selected to ask questions, and that was a special highlight. The first question was for Buffett to discuss his estate plan and to elaborate on his famous line: “I want to leave my children enough so they can do anything, but not so much that they can do nothing.” Click here for Buffett’s answer. The second question was to ask Buffett to discuss his philanthropy and how he decided to become a philanthropist. Click here for his answer. I have found that people care what Buffett and Munger say, so at future meetings I’ll try to seek more guidance from them on estate planning topics.

Here are some other takeaways from this year’s meeting:

• The number one reason for Berkshire’s success is the company’s culture. Create a positive work environment where people feel they are part of a family who cares about them. Hire the best people and set them free to soar. That’s certainly my goal at The Blum Firm.
• The second half of life offers the best opportunities. Learn from mistakes you made in the first half of life, and that sets you up for success in the second half of life. Don’t beat yourself up over mistakes. Even Warren and Charlie made plenty of mistakes.
• Be forgiving when your team makes mistakes, as long as it’s not a slip of integrity. Buffett and Munger are unequivocally supportive of their team, as long as the employee behaves with utmost integrity.
• Don’t panic over stock market declines. See it as an opportunity to pick up bargains. Ride out the waves, and you’ll win over the long run.
• Maintain a sense of humor. Warren and Charlie made every topic fun and enjoyable, no matter how serious. I believe their sense of humor helps sustain them.

The Kriger family is already making plans for next year’s annual meeting. Here’s hoping Buffett and Munger will still be going strong next year, but given what I just saw, I’d put my money on them.

I urge you to come up with some meaningful experiences your family can share. It’s essential in building and sustaining family connection. As you consider the possibilities, perhaps you’d like to join us next year in Omaha!

Marvin E. Blum

It’s All About Relationships—Meet the Canoe Brothers

May 10, 2022

Early on in this Family Legacy Planning series, I stressed the importance of each family creating a Family Mission Statement. The process involves (1) discovering the values that family members hold in common, (2) jointly developing a vision for the kind of family they want to be, and (3) merging those values and vision into a written expression of the family’s guiding principles. As each family member embraces that mission, it helps the family develop a core. Indeed, the mission statement guides the family through decisions and helps keep it on track and unified. Ideally, the family mission guides the whole estate planning process.

The Blum family adopted a three-pronged mission statement:

1. Relationships
2. Productive Work
3. Living a Meaningful & Spiritual Life

For us, it all starts with relationships. I’d like to dive deeper into that first prong of our mission statement. The seed for it was actually planted years ago when Fort Worth community leader Gretchen Denny said to me: “Marvin, it’s all about relationships.” That statement struck me as profound, yet a bit puzzling. I was too young to fully understand where Gretchen was coming from. Why did that beat out everything else we strive for in life? Gretchen, widowed at a young age when her attorney husband Sam Denny died way too early, realized that more than anything else, relationships are what fulfills us and nurtures us. As I’ve gotten older, I now get it. That’s why it earned the position of first place in our mission statement.

Harvard professor and author Arthur Brooks supports my thesis in his article in The Atlantic “10 Practical Ways to Improve Happiness.” In addition to being there to support and nurture us, relationships actually tops the list on how to increase our happiness. An international team of researchers identified 68 ways to raise happiness, then narrowed it to ten and ranked them. Note how Brooks’ description of number one and number two echo my emphasis on relationships:

1. Invest in family and friends. The research is clear that though our natural impulse may be to buy stuff, we should invest instead in improving our closest relationships by sharing experiences and freeing up time to spend together.
2. Join a club. The “social capital” you get from voluntarily and regularly associating with other people, whether or not you do so through a formal club, has long been known to foster a sense of belonging and protect against loneliness and isolation.

I am witnessing firsthand how relationships are enriching my life. It started 47 years ago when I entered The University of Texas Law School and bonded with an extraordinary group of classmates. Over the years, those friendships have deepened. Thanks to the efforts of my best friend Talmage Boston (“the connector”), we have not only remained connected, but we continue to grow closer. The reason those friendships have grown into lifelong relationships is because a core group of us share meaningful experiences with each other. Certainly, sharing the law school experience was bonding, but we are even more glued together because of regular activities we do together, especially an annual canoe trip on the Guadalupe River. We call ourselves the “Canoe Brothers.”

On those canoe trips, we open our hearts and minds to hear each other’s life stories. We each bring our own values and opinions. We agree, we disagree, we debate, but we do it all with respect. Through this shared canoe experience, we build trust, and trust is the foundation for a lasting relationship. All of this is possible because we make the time to be together and share experiences. The renowned author Malcolm Gladwell expressed it perfectly: “You can’t share values with others until you share meaningful experiences with them. It is through these meaningful experiences that you come to know what their values are. Those you agree with and those you don’t; but the relationship, trust and friendship has been shared through the experiences first.”

As I urge families to engage in a legacy-building process, I stress the importance of family enrichment activities. Like the bonding that Canoe Brothers share on the Guadalupe, families likewise need intentional, regular experiences together. At The Blum Firm, we encourage clients to weave this priority into the estate plan. The safest way to foster lasting family unity is to set aside funds in a FAST trust dedicated to paying for family meetings, meaningful group travel, and other family enrichment. Endowing family experiences strengthens the ties that bind us. It’s the best inheritance you can leave your heirs.

Marvin E. Blum

I Do, Round Two: Second Marriage Estate Planning

May 3, 2022

I was honored to speak recently to the Midland-Odessa Business and Estate Council. I selected a subject that has become a significant part of our estate planning practice—second marriage estate planning.

Why is this such a hot topic? Consider these statistics:

• 50% of today’s marriages are second (or third or fourth) marriages for at least one of the spouses.
• 75% of people who divorce marry again.
• 65% of remarriages involve children from a prior marriage.

Estate planning for the traditional “nuclear” family is less and less the norm. We are living in a world of the “blended family” (or, “modern family” as popularized on TV). More than half of Americans are part of a blended family.

Multiple marriages bring issues that the estate plan needs to address:

• Onboarding a new spouse (perhaps with kids of his/her own) into a family unit
• Relationships between children and a stepmother or stepfather
• Relationships between stepsiblings
• Age disparity between spouses
• Wealth disparity between spouses

Such issues create a potentially hot family dynamic. The Blum Firm is committed to helping blended families create thoughtful estate plans, reducing the risk of later friction. We are also committed to helping families navigate these new relationships and foster a family’s human capital.

Here’s another sobering statistic: 60% of remarriages end in divorce. Accordingly, the responsible couple will do prenuptial planning to address the “what if” before saying “I do.”

In my speech, I identified 18 fact situations that could give rise to heartache if not properly addressed in the estate plan. A copy of my presentation on Second Marriage Estate Planning is available here. The Blum Firm is honored to share planning tips to help preserve family harmony in cases of “I Do, Round Two.”

Marvin E. Blum

Declaration of INTER-dependence

April 26, 2022

Last week’s email told the story of how my support group (especially my brother Irwin) came to my rescue when the 2000 tornado destroyed The Blum Firm law office. I introduced the concept of INTERDEPENDENCE. Families who are interdependent are there for each other, helping everyone thrive as we go through life’s ups and downs together.

As families become more affluent, there is a tendency toward each person becoming more independent. Dr. James Grubman describes this process in Strangers in Paradise. Grubman refers to new wealth generators as “immigrants to the land of wealth.” As families leave the land of the working class and immigrate up the wealth ladder, they travel away from interdependence, more and more to a land where each person is independent. Our American culture encourages that process. We strive to bring up our children to be independent and self-reliant. We are a country created out of a Declaration of Independence. Yet independence can go too far, even to the point of causing family estrangement. As family governance consultant Tom Rogerson puts it: “Independence is great, except when it fully cannibalizes interdependence.” Yes, we declare our independence, but this country was founded on a Constitution that begins: “We the people,” not “I, the person…”

Lower net worth families have tremendous interdependence. Why? It’s out of necessity. I can relate. Irwin and I grew up in a small house sharing a bedroom, sharing a bathroom, and we all pitched in to work in Blum’s Café. Dinner table conversations were about the family business and making ends meet on a tight budget. On the rare occasions when we bought a new car, my dad took us along to watch him negotiate. Irwin and I went door-to-door collecting coat hangers to sell at the cleaners, two for a penny. (Actually, Irwin sent me out to collect the hangers while he stayed back to “run the business,” but I felt honored as the kid brother to be included in his business venture.) That upbringing provided us a natural family glue. It’s no wonder we were always there for each other, tornado and all. I believe Irwin knows he could count on me too (and not just when “helping” him write all his papers for school). As I’ve shared before, the ultimate example was on Irwin’s deathbed from pancreatic cancer, when he held onto life just long enough to provide blood for a genetics kit, so that I (his only at-risk blood relative) could gather critical genetic information for my own health care. Irwin held onto life, knowing I needed that blood study, and then he died moments after giving blood.

Tom Rogerson uses a graph to illustrate the risks to family cohesion when they move away from interdependence.

The horizontal axis moves from low wealth to extreme wealth. The vertical axis starts with interdependence, then moves up to independence, and further up to an unfortunate state of dependence. The graph shows that as wealth increases, family members become more and more independent. Dinner conversations are more social (“How’s your golf game, Dad?”) and less consequential. Kids have their own bedrooms and go to summer camp, no longer learning how to work with and negotiate with siblings. They lose training on how to make decisions together. They become less and less connected.

The lower left corner fosters entrepreneurialism. That’s the environment that created the juice for most of today’s wealth creators to thrive. Moving toward independence, with each person in his own silo, is detrimental to entrepreneurialism and especially detrimental when kids enter a family business. They love each other, but they don’t KNOW each other deeply. At its worst, it can lead to lives of isolation and substance abuse, hence the arrow leading back up towards dependence.

The graph shows that there is a movement for families of extreme wealth to reconnect, to intentionally work on rebuilding relationships with each other. The goal is to reestablish communication and build trust. The best way to do this is to embark on regular family meetings with team-building exercises and group learning. A third-party consultant should facilitate the meetings. Parents should join as participants and not run the meeting. The estate plan needs to adapt as well, using trusts to encourage family togetherness, enrichment, and mentorship of heirs. The goal is to build self-esteem and empower heirs, rather than create entitled “trust babies” waiting on their monthly distribution, deprived of incentive to get out of bed. Ultimately, the family creates a “familiness” culture where they are woven together in a family fabric, as Irwin and I were there for each other during the tornados of our lives.

I am grateful to Tom Rogerson, Jim Grubman, and other mentors who have awakened me to this new age of estate planning. I am an eager proponent of “qualitative” estate planning to go along with the “quantitative,” or estate planning that is both “heart” and “head.” I want to thank all of you who are encouraging me to share my passion to help families build a legacy and thrive from generation to generation. As commercial real estate broker Bill Zei of Dallas graciously wrote me: “Your writings help me stay mindful of how deeply important it is to stay united with family.” I’m honored to be a champion for that cause. At your urging, I will continue to share the lessons from the “soft” side of estate planning in my evolving journey as a holistic trusts and estates lawyer. The Blum Firm welcomes the opportunity to help you incorporate legacy planning into your estate plan.

Marvin E. Blum

When Life Throws You a Tornado

April 19, 2022

The most recent topic in our Family Legacy Planning series is the importance of resilience. Specifically, I wrote last week of how Laurie and I overcame the heartbreak of a giving birth to a stillborn child by drawing strength from ancestors who’d endured inhumane atrocities yet survived. Reactions to that post were heartfelt and affirming, as many shared how they have likewise overcome rough times. Like me, their resilience was fueled by the strength of their family ties, as well as the support of a loving community of friends. One response particularly grabbed me. Here’s what my San Francisco colleague David Eckstein, CFA sent me:

I’d like to add my voice to the many who are thanking you for sharing your stories. This one reached me in particular. My wife and I have also faced tragic misfortune, including suddenly losing the oldest of our three sons a few weeks before his 27th birthday. Such times test our resilience and also tell us whether we have invested enough in our family and community to receive the support we need to get through times we can’t handle alone. We have been fortunate in that regard and consider ourselves blessed in spite of our losses. Thank you for all you’re doing to make a difference in your family, friends, clients and business acquaintances. It’s working!

The words “we have invested enough in our family and community to receive the support” particularly struck me. The support we receive isn’t automatic. We have to invest in these relationships, so we will be there for each other when needed. Like everything else in building a legacy, we have to be intentional to make it happen. Building a family legacy is arguably the most important investment we make in our lives.

I’ll expand on a story I’ve shared before about recovering from the 2000 tornado that destroyed my law office, and how that resilience was also empowered by the support of family and community. Leaving work on March 28, 2000, the sky was clear and there was no warning of the impending tornado that soon swept through downtown Fort Worth destroying the Bank One Tower and other structures. This was before technology was as advanced, when we were still dependent on paper. I didn’t even own a cell phone yet (what we then called a “car phone”). The Blum Firm was suddenly homeless, without access to any of our files. This is when my support group came to the rescue. Lifelong family friends Morty Herman and the Schuster family were early responders. Morty and the lawyers at Brown Herman law firm squeezed up and made room for us to office with them. When Bank One gave us a one-hour access to return to our destroyed space to grab belongings, Stuart Schuster loaned us a large van from their Marvin’s Electronics store. Allen Schuster provided us boxes from his storage facility business. “Take as many as you need.” My father showed up at my house and handed me $10,000, saying: “This may come in handy.”

But the number one hero in this story is my brother Irwin. As I shared in previous emails, we lost Irwin five years ago to pancreatic cancer, at age 65. One of my favorite Irwin memories is how he sprang into action to help me deal with the tornado devastation. Irwin wasn’t a man of words; he was a man of action. Irwin and I picked up the van and the boxes and drove to Bank One. Irwin drove the van like he was a professional truckdriver, undaunted by its massive size. Entering the parking garage, the rack on top was too tall for the height restriction and bounced off. Unfazed, Irwin hopped out, threw the rack in the back of the van, and kept rolling along to park in the garage. We were on a mission. We had a strict one-hour time limit to grab all we could.

We entered the office space. I was in shock. Everything in the office looked as if it had been picked up and thrown across the office. Desks and furniture were toppled over and broken. Wet paper was everywhere, full of glass chards from the shattered windows that imploded inward into millions of razor-sharp pieces. The building was formerly a glass tower that now had no exterior walls. Live wires were hanging everywhere. Birds were flying through the space. I was paralyzed. Irwin wasn’t. Irwin began assembling boxes, put on work gloves and a safety helmet, and started tossing in everything he could grab, filling box after box. I finally took his lead and joined in. We had to get moving; we only were allowed one hour.

We stacked the boxes floor to ceiling into elevators, then managed to force them all into the van. As we hit the highway, Irwin could only see out the side mirrors (though I’m not sure he ever looked). He’d hit the gas pedal and change lanes; I guess other vehicles just dodged us. Exiting I-30, he pulled into the drive-through at Whataburger for a burger and soda, and he ate it while driving home to store the boxes in my garage. Even for those who didn’t know Irwin, I’m sure you get the picture.

Irwin always looked out for me. He had a “take charge” personality and he enjoyed being the protective big brother, even well into our adult years. This story brings me to a new topic I’ll be developing in coming emails: the value of family INTERDEPENDENCE, as opposed to the customary concept of raising kids to be INDEPENDENT. My colleagues Jim Grubman and Tom Rogerson are also great advocates for this concept. I am grateful Irwin and I were interdependent, so we were there to provide family support for each other when needed. Life throws us curveballs and tornados. We need to be there for each other.

Marvin E. Blum

The Greatest Test of Resilience in My Life (and How Zaidy Got Me Through It)

April 12, 2022

Over the last several weeks of our Family Legacy Planning series, we’ve highlighted the importance of preserving ancestors’ stories of resilience. Heirs draw strength knowing they descend from survivors who had what it took to overcome life’s obstacles. Certainly, I’ve made it through hard times better by knowing I come from survivors who endured persecution. I’ve told the story of my “Zaidy” Eliezer Weinstock and what the Weinstock family endured when escaping Hitler, losing two children who didn’t make it out in time. The Weinstock family picked up the pieces and created a new life in America. In our family, we often gain confidence to handle problems by saying, “We come from good stock, WEIN-stock.”

When I started writing this series over a year ago, I never intended to tell my personal stories. My plan was only to share estate planning tips. However, in using some of my own stories to illustrate these tips, I’ve received on outpouring of encouragement to continue sharing. After the recent emails about my ancestors’ hardships, I was asked to describe a time when I applied those lessons in my own life. At your urging, I will open up about the single hardest moment I have faced in my life. I’ve shared this before, but with your indulgence, I’ll provide more detail, hopefully offering to all the gifts of faith, love, and hope.

After Laurie and I were married a couple of years, we rejoiced at becoming pregnant with our first child. It was a perfect pregnancy all the way up through the ninth month. Laurie went into labor and we headed to the delivery room, stopping along the way to buy a disposable camera (remember those days?). When my mom called on the phone in the delivery room, she greeted me by saying, “Hello, Daddy!” It was then I shared a disconcerting update—the nurse was having trouble finding the baby’s heartbeat. We remained hopeful, as sonogram technology was still fairly new and maybe there was some technical glitch. The doctor arrived and the news became grim. We’d lost the baby. No one ever understood why or what happened. It was a mystery we’d have to live with forever. That was February 11, 1982. We buried our baby girl and returned home to an empty nursery.

We were devastated. I wasn’t ready to disassemble the crib, but Laurie told me we had to do it. We hid away all the shower gifts Laurie had received from her co-workers at Fort Worth National Bank. Laurie returned to work, daily confronting the question in the elevator: “What’d you have?” Laurie found the courage to answer each time, “We lost the baby.” You’ve likely gathered by now that I married a woman of phenomenal strength. Laurie’s a sweet, gentle Southern girl, but lives up to the stereotype of a “steel magnolia.”

We were grateful to be pregnant again within a few months, but as you can imagine, we were filled with trepidation. Laurie wouldn’t even tell anyone she was pregnant. About halfway through the pregnancy, we were at a symphony event and Roz Rosenthal nodded toward Laurie’s tummy with a question mark on her face. That night, I told Laurie it was time to let the word out.

On the morning of February 10, 1983, about a month before the due date, I went to work like a normal day. Laurie soon called that she thought she felt a contraction. There had been no signs of early labor. Was this a false alarm? We weren’t taking chances. We met her doctor at the delivery room who confirmed that this was the real thing. Soon after midnight, February 11, 1983, Laurie gave birth to a healthy baby boy. I’ve always believed that Laurie and the Divine willed it to be, that February 11 should be a miracle day for us. Exactly one year to the day after losing our first baby, we were blessed with Adam.

I’ll share another fact I’ve not revealed before. We saved the Hebrew name we were going to use for our first baby girl, with the hope we’d someday have a daughter. That name was Pesha Ita, the Hebrew name of my grandmother Pauline, the daughter of “Zaidy” Eliezer Weinstock. Within three years, our prayers were answered with the birth of Elizabeth Pauline (“Pesha Ita” in Hebrew). Our daughter is yet another miracle, as she carries the name of such a valiant ancestor, while she also carries in her the soul of a sister in heaven.

Fast forward to our daughter’s first pregnancy. Several weeks before Lizzy’s due date, we received an urgent call that her baby was under stress. Laurie and I rushed to the airport, got the last two seats on the next flight to New York, feeling an all too familiar déjà vu from our own first pregnancy. That was a scary trip—a nonstop flight with nonstop prayer. We rushed to Mount Sinai Hospital, and within the hour arrived a small but healthy baby girl Stella, the first member of the fifth generation in the Meyer Oberstein–Pauline Weinstock family tree. “Zaidy” Eliezer Weinstock was there for us once again. Never lose faith, and never underestimate the power of our ancestors to pull us through. They are angels on our shoulders as we go through life. May we preserve their memories and their stories forever.

Marvin E. Blum

Bringing Lessons of the Holocaust into 2022

April 5, 2022

The last several emails in our Family Legacy Planning series have revealed the atrocities suffered by my family in the Holocaust. My Zaidy’s eye was poked out in a Russian czarist pogrom in his village in Ukraine. My grandfather Meyer at age 9 escaped a firing squad in Poland when he was caught seeking work after curfew. My son-in-law Ira’s grandmother Miriam survived Auschwitz, coming out at 72 pounds. Her only surviving relative was her brother Adolf (“Unkie”), also imprisoned in forced labor and concentration camps. Profoundly, Unkie declared “We beat Hitler!” on his deathbed as he observed the birth of Jewish descendants, including my granddaughter Stella who started a new generation in our family. These Holocaust stories have stirred a powerful reaction, especially given the parallels with the atrocities now happening in Ukraine.

It’s a well-known proverb that “unless we learn from history, we are doomed to repeat it.” Considering the present-day Russian aggression, I fear we aren’t adequately learning from history. It’s critical that we preserve and pass down stories of ancestor survival to our heirs. The need is especially urgent as the generation of Holocaust eyewitnesses is rapidly perishing. That brings me to my message today. How can we best bring our ancestors’ stories into 2022?

My daughter Lizzy Savetsky has a solution. Lizzy has a vast Instagram following and is using these stories to sound an alarm. We must never forget! Remember the people we come from and draw courage from them. Lizzy’s megaphone literally and figuratively awakens us that we cannot stand by silently while our brothers and sisters are persecuted and murdered. Laurie and I stand in awe of Lizzy’s heart and bravery.

Lizzy’s premise is that the ultimate way to preserve memories is to see where it happened with our own eyes. To that end, Lizzy joined a Heritage Trip to Poland sponsored by Jewish International Connection New York. Lizzy went to Auschwitz. She sat on the railroad tracks where cattle cars brutally transported millions of Jews to their death. She saw the barbed wire fences with the sign proclaiming the Nazi lie “Arbeit Macht Frei.” Indeed, work did not make them free. Lizzy stood in the place where her husband’s grandmother was forced to gather the possessions of gas chamber victims, finding her own mother’s monogrammed handkerchief and thereby discovering that her mother had been gassed to death. She saw a room filled with hundreds of thousands of shoes of victims and realized every shoe was once on a person’s foot. The six million victims were not statistics. They were the people who wore these very shoes.

When Lizzy returned, she wrote her reflections from being there in person, in the place where it happened. Click here to read her heartrending summary of the trip. Imagine the powerful disconnect to stand in a beautiful forest in Poland and try to reconcile how, in that very place of nature’s paradise, Nazis could line up thousands of Jews and shoot them into a ditch, many buried alive. Lizzy closes with a quote from the rabbi on their trip: “The Nazis tried to bury us, but they didn’t realize we are seeds.” Those tortured souls who were buried in that ditch are now sprouting new life, lives like my five grandkids Stella, Juliet, Lucy, Ollie, and Grey.

How does this message of family heritage and travel tie into The Blum Firm’s work in Family Legacy Planning? Here’s how. Every family has roots. It’s important for future heirs to go in person “to the place where it happened.” As Lizzy pointed out to me last week, it’s even more meaningful if a trip like this is taken as a family. Family travel, whether a roots trip or other travel, helps keep a family unified. I’ve previously quoted author Mitzi Purdue as she credits annual family travel as the foremost reason her family (heirs to Sheraton Hotels and Purdue Chicken) stays connected. In creating your estate plan, I strongly urge you to set aside funds in a separate trust to be used to pay for family travel and other family enrichment, like family meetings, training, and experiences. If you fail to fund it, my observation is that it stops happening after the patriarch and matriarch are gone. The fund can be a FAST Trust (Family Advancement Sustainability Trust) or any other trust vehicle. Consider dedicating a life insurance policy to fund the trust, a convenient way to provide the money without disrupting the rest of the inheritance.

The Blum Firm would be honored to help you build such a family enrichment fund into your estate plan. We want to partner with you to keep your ancestors’ stories alive and help future generations of your family stay connected.

Marvin E. Blum

What Stella’s Birth Means (“We Beat Hitler” – Part 2)

March 29, 2022

Last week’s Family Legacy Planning post continued exploring the importance of preserving and passing down a family heritage. The focus was on the significance of the birth of my oldest grandchild, Stella. On both sides of her family, Stella descends from ancestors who miraculously escaped death in the Holocaust. Stella’s birth symbolizes victory over Hitler’s evil attempt to kill all the world’s Jews. Hitler killed one-third of the world’s Jews, but he didn’t win. Stella is living proof.

The last two weeks’ emails told stories of survival of two of Stella’s ancestors on her mother’s side, my “Zaidy” Eliezer Weinstock from Ukraine (who lost an eye in a Russian pogrom) and my grandfather Meyer Oberstein from Poland (who escaped a Russian firing squad as a young boy). Today, we turn to survival stories of ancestors on Stella’s father’s side, my son-in-law Dr. Ira Savetsky.

Ira’s grandmother Miriam Feuerstein was viciously uprooted from her girlhood home in Czechoslovakia and transported, along with her parents, to Auschwitz, the most infamous of Nazi concentration camps. One of her brothers, Yitzchak, was shot into a ditch when the Nazis wiped out the town. Another brother Adolf was taken to a Hungarian forced labor camp, and later to Mauthausen concentration camp. Miriam’s job at Auschwitz was to sort the clothing of those who had been burned alive in gas chambers. She discovered the tragic fate of her parents when she found her mother’s monogrammed handkerchief among the pile.

Miraculously, Miriam survived, coming out of Auschwitz at 72 lbs. She was able to find her brother Adolf, who had also miraculously survived. All their remaining family had been murdered. Miriam and Adolf immigrated to America and started a life in New York. For yet another miracle, Miriam recovered and later gave birth to a daughter Aliza (Ira’s mother) and a son Elliot. Aliza had 4 children. To help keep the memories alive, Aliza named one of her daughters Miriam, after her mother, and she gave her son Ira the Hebrew name of Yitzchak (the Hebrew name for Issac), after her uncle.

As I retell this story of survival, I realize the power of personalizing the horrors of the Holocaust and war. It’s hard to absorb statistics, like the killing of six million Jews, but this story reminds us that those were six million individual lives. As my dear friend Todd Healy responded to my email about Zaidy, “Thanks for personalizing it for so many of us who don’t have the connections to the tragedies that you do!” These are people, someone’s parents, sisters, brothers, children. They are not just numbers.

Ira’s family affectionately called their Uncle Adolf, “Unkie.” Unkie was like a grandfather to Ira. Thankfully, Unkie lived a long and productive life in America. On his deathbed, he reflected on the families he and his sister Miriam created, who were surrounding his bedside. Looking at them with awareness that each descendant of Holocaust survivors represents the continuation of the Jewish people, these were Unkie’s dying words: “We beat Hitler!”

As the attached photo of Unkie holding his great-great-niece Stella proves, indeed we did beat Hitler! Stella’s life has a purpose. Look into Stella’s eyes—there is hope for the world. Each of our lives has a purpose. As we discover our “why”—why we’re here, may that motivate us to each live a more purposeful and meaningful life.

Marvin E. Blum

What Stella Means to Our Family Heritage (“We Beat Hitler” – Part 1)

March 22, 2022

I am overwhelmed by the outpouring of support I received from last week’s Family Legacy Planning email “I Am Ukrainian.” I told the story of my “Zaidy” Eliezer Weinstock who lost an eye in a Russian pogrom against Jews living in Polona, Ukraine. Miraculously, Zaidy escaped to America with his four youngest children, including my grandmother Pauline. Zaidy’s two oldest children, my Great Aunt Elke and my Great Uncle Enoch, remained in Ukraine and were murdered in the Holocaust.

It’s particularly gratifying to hear comments from those of you who were inspired by my story to share your own family heritage with your heirs. As an example, Bob Semple replied: “Your comments on knowing your family heritage are spot on. I am making sure my family knows our heritage.”

I cannot overstate the importance of preserving family history to pass down to future generations. Luther King’s response to me reinforces this message: “I could not agree with you more regarding the importance of preserving family heritage and building pride and respect around it. Families we have worked for that have stressed their heritage, as a general rule, hang together and have high self-esteem.” Passing down that history, especially stories of resilience, proves enormously strengthening to kids when facing obstacles of their own.

Many encouraged me to continue sharing my personal stories, so at your urging, I’ll do a bit more of that. My hope is to continue inspiring people to do the same. Every family has its own stories. I urge you talk to your relatives and uncover those stories, then write them down to preserve them for future heirs.

Soon after my Zaidy Eliezer arrived in the US, he spotted a young man at synagogue services, and invited him home to join the Weinstock family for Shabbat dinner. That man was Meyer Oberstein, a recent immigrant from the town of Tiktin in Czarist Russia (later Poland). It was love at first sight between Meyer Oberstein and Pauline Weinstock, and they soon married.

My grandfather Meyer Oberstein’s story is also miraculous. Meyer was nine years old when World War I broke out, and the Jewish towns and villages around Tiktin suffered great danger, dislocation, and starvation. As a young boy, Meyer was out one night after curfew trying to find work to earn money to help feed his family. He was caught by Russian soldiers who lined up a firing squad to shoot him. Then a miracle occurred. An old Russian commissar with a beard rode up on a donkey and asked why they were going to shoot the boy. The Russian soldiers responded that little Meyer was possibly a German spy. The old man told them to let Meyer go, that he was only a kid and not a spy. That is how close my grandfather came to death.

Hitler’s goal was to kill all Jews, and indeed he did kill one-third of the world’s Jews in the Holocaust. The best victory we can now have over Hitler is for more Jews to be born, perpetuating the Jewish people. We cannot bring back the lives lost, but with every new generation of Jews, we are resolving that Hitler did not win.

Fate brought Meyer from Poland and Pauline from Ukraine to Montgomery, Alabama, where they married and had four children, including my mother Elsie. Meyer and Pauline were Generation 1 for our family in America. My mother Elsie and her three siblings are Generation 2. My brother Irwin and I, along with our 16 first cousins, are Generation 3. My children Adam and Elizabeth, along with their cousins (numbering nearly 100), are Generation 4.

So where does my oldest grandchild Stella fit into this story? In the family tree that starts with Meyer and Pauline, the first member of Generation 5 is Stella Savetsky, born nine years ago to our daughter Elizabeth and her husband Ira. Generation 5 will eventually number in the hundreds, and Stella will always have the distinction of being the first member of that generation. Stella’s life has a purpose. Stella represents the continuation of the Jewish people and our resilience. We say in Hebrew, L’dor Vador, from Generation to Generation. Going all the way back to Moses and the children of Israel, Stella’s life is proof that the unbroken chain continues!

Marvin E. Blum

I Am Ukrainian

March 15, 2022

As part of our Family Legacy Planning series, we have stressed the importance of preserving family heritage. Statistics show that children who know more about their ancestors grow up with a higher self-esteem. Moreover, knowing stories of ancestors who overcame obstacles gives heirs confidence they too can be resilient when hard times strike.

In my own family’s mission to learn more about our past, I have discovered some powerful revelations. All four of my grandparents immigrated to the United States from Eastern Europe to escape the Holocaust. Many of my ancestors descend from Ukraine, from a town they called Polnoa, now known as Polonne or Polona. Given today’s war in Ukraine, I feel a strong solidarity with the Ukrainian people.

My family’s life in Ukraine was difficult. Jews were persecuted by the Czar. Our “Zaidy” (the Yiddish word for grandfather) even had one eye poked out in a vicious pogrom against the Jews. My great-grandfather Eliezer Weinstock (“Zaidy”) was among the lucky few who made it to America. He left behind all of his possessions except “the knowledge between his ears,” prompting him to say: “What you put into your mind, no one can take away from you.” Hence, our family put an emphasis on education and giving your all in a commitment to lifelong learning.

I always thought all of Zaidy’s family made it to America. I was shocked recently when our longtime paralegal Becky Samons made a hospital visit to my mother and asked her if she lost any family in the Holocaust. I expected her to answer “no” but, for the first time I learned, the answer was “yes.” Zaidy’s two oldest children, Elke and Enoch, were both married and unable to afford passage to the U.S. They remained behind and became victims of Hitler’s mission to exterminate all Jews. My mother recounts that she and her grandmother shared a bed, and their nightly prayers were that Elke and Enoch were still alive. But, they were never heard from again.

My one-eyed Zaidy never learned English, forever clinging to Yiddish, his mother tongue. In his late years, he went before an Alabama judge to apply for U.S. citizenship. Though unable to pass any test in English, the judge waived the formal requirements and proudly declared him a United States citizen, saying anyone who’d endured his plight was worthy of U.S. citizenship.

I am proud to descend from Ukrainian Jews who instilled in me values of family, education, and leading a productive and spiritual life. I am now the proud grandfather of five grandchildren. When time came for me to choose the name my grandchildren would call me, I was honored to select “Zaidy” as my name, a tribute to my Zaidy Eliezer Weinstock. Without question, being “Zaidy” will always be the most important part of my identity.

Marvin E. Blum

Business Succession Planning: Not Every Family Has an Elsie

March 1, 2022

I have a confession to make. In last week’s Family Legacy Planning email, I identified “business succession planning” as the most neglected area of estate planning. I grew up in a family business. Here’s my confession: our family also neglected business succession planning. There, I said it. Sometime the cobbler’s own shoes need attention.

As it turns out, in failing to plan for the transition of our family business, we are in the company of millions of others. Consider these statistics: 90% of American businesses are family-owned or controlled, yet less than one-third of those businesses have a succession plan. The family is left unprepared when an unexpected event occurs, such as the death of the owner. That’s what happened when my brother Irwin died. Irwin ran our family business, and when he died only two weeks after his cancer diagnosis, we were caught off guard. Fortunately, we had a savior—my 86-year-old mother Elsie emerged from retirement and, over the course of a year, single-handedly shepherded the business through to a successful conclusion. We were fortunate she had the skills and strength to rescue us. There was no one else besides her who knew the business and could have done what she did. Had it not been for my mother, we’d have been in desperate shape.

But not every family has an Elsie. I urge all business owners to learn from our story and have a succession plan in place. That way, if you’re caught off guard and don’t have an Elsie, your family will know what to do.

Here’s the story of our family business. When I was an infant, my father Julius started our family business. It wasn’t glamorous. It was an industrial café in Fort Worth’s meat packing district. We opened before 5:00 a.m. and served meals to the packing house employees. It wasn’t air conditioned, and our customers came straight from the area killing floors, boning rooms, and rendering plants—covered in blood-stained work clothes. The sight was one thing; the smell was even harder to imagine. I grew up working alongside my parents and brother from the time I was a mere toddler—clearing tables, washing dishes, cooking, and (as soon as I could add) working the cash register. That business gave me an education unlike anything my friends and I learned at school. It was hard work, but it provided us an honest living. My father used to say: “If you take care of your business, it will take care of you.” Indeed, that was true.

As I said in last week’s email, like so many business owners, my parents lived and breathed their business as if was like another child in the family. That day’s business was the topic of conversation at dinner every night. I understand and respect how people become so attached to their businesses, all the more reason to plan for the continuity of that business when the day comes the founders are no longer there to run it.

Over the years, Blum’s Café gradually morphed into J. Blum Co. Meat Packing Supplies. We started selling the workers knives, gloves, rubber boots, hard hats, frock coats, and all the other things meat packers use in their trade. Then we expanded into selling those supplies to meat packing businesses. I continued working in the business throughout my school years. Motivated by that school of hard knocks, I went full force into my studies and opted to become a CPA/tax lawyer. But my brother Irwin stayed on in the family business. When my father died and my mother retired, Irwin ran the business. Irwin was a dynamo—working like a machine, running every aspect of the business and keeping most it in his head. When he died, the only one who knew what was in Irwin’s head was my mother. In her mid-80’s, Elsie jumped right in with full force and took over. She’s a miracle woman.

Here’s the moral: Don’t depend on an Elsie to appear out of the blue and rescue your family business if the owner is suddenly gone. In the coming weeks, I’ll cover the steps to take in creating a business succession plan. And in the spirit of my confession, I’ll close with the adage: Do as I say, and not as I did.

Marvin E. Blum

The Most Neglected Area of Estate Planning

February 22, 2022

In a radio interview, I was once asked “What’s the most neglected area of estate planning?” Without hesitation, I replied: “business succession planning.”

Last week’s email on prenup planning referred to Jon Moore’s article in Family Business magazine entitled “In a Divorce, Who Gets What?” In it, Moore emphasized the importance of advance planning, so family businesses survive divorce and/or death. He stresses the concept of “integrated planning,” coordinating all the puzzle pieces: estate planning, disaster planning, asset protection planning, and business continuity planning. It takes more than hope and luck for a business to transition through major family changes and disruptions, especially the death of a founder. It takes careful planning.

Most business owners have a strong emotional connection with the business they created, almost as if it’s another child. They care what happens to the business after they’re gone. They have a keen interest in building a sustainable business that passes down as a meaningful legacy to future generations. Given the aging demographic of many baby boomer business founders, there is an urgent need to plan for what happens WHEN, not IF, the founder is no longer running the business. Family business owners are often so emotionally tied to the business that they have a hard time imagining the business without them. They believe they are indispensable. But as Charles de Gaulle, former president of France, famously said: “Cemeteries are full of indispensable people.”

When it comes to business succession planning (also known as business continuity planning or business transition planning), there are no easy solutions or fill-in-the-blank forms. The hardest part is to get started. Here’s a suggestion for the first step: call a meeting of those most familiar with you and your business and designate them as your planning team. Choose from among your CPA, attorney, banker, financial advisor, life insurance professional, family counselor, and other key stakeholders. Bring your planning team to the table to start the conversation. They will gradually help you develop a succession plan that makes sense for your business and your family. Then, they will guide you through the steps to implement the plan. Don’t try to go it alone.

When the time comes to develop the plan, it really boils down to three choices in the toolbox:

• Transfer the business to family members
• Sell the business to inside parties (people within the business)
• Sell the business to an outside party

In coming emails, we’ll explore more about the business succession planning process, and dive into each of these options. The Blum Firm would be honored to partner with you to help you achieve a successful continuation of the business legacy you worked so hard to build.

Marvin E. Blum

Addressing the “What If’s” Before Saying the “I Do’s”

February 15, 2022

We continue this week with our Family Legacy Planning segment on “the year of the wedding.” As mentioned last week, much of the goal of protecting family assets can be achieved outside of a prenup agreement through a “prenup alternative.” A prenup alternative utilizes irrevocable trusts and/or entities to protect assets. By carefully using these common estate planning tools, you can convert what would’ve been “marital property” into “non-marital property,” an important distinction.

All assets benefitting a Texas married person fall into one of two categories: marital property and non-marital property. Within the category of marital property, there are two sub-categories: community property and separate property. Separate property consists of assets owned before marriage or acquired during marriage by inheritance or gift. All of a spouse’s other assets, including income received from separate property, are community property. There is a presumption that all assets are community property, barring clear and convincing evidence that an asset is separate property. When separate and community are commingled, the commingling generally results in the assets becoming community. When a family court divides community property, it doesn’t necessarily divide it 50/50. The court can make a “just and right” division and award more than one-half to a spouse, taking into consideration equitable factors. One of the factors that a court can weigh is whether one of the spouses has more separate property than the other. So even though separate property cannot be awarded to the other spouse, it is still on the table for consideration and can impact the way a court divides the community property. On the other hand, non-marital property is not on the table for consideration in a divorce settlement.

Assets owned by a carefully drafted irrevocable trust are non-marital property. Ideally, parents will direct that all gifts and assets passing at death go to such a trust for their child. Single adults who have already accumulated assets in their own name can transfer assets to certain “self-settled” non-Texas trusts or can sell assets to a 678 Trust. When assets are transferred to a self-settled non-Texas trust or sold before marriage to a 678 Trust, the assets in the trust will continue to be non-marital property, even as they grow. If the assets were sold for a promissory note, the note will be separate property. However, the note will be frozen in size and is the type of asset not susceptible to being commingled. Irrevocable trusts are far less likely than prenups to be subjected to legal challenge. Legal precedent tends to favor respecting the integrity of the trust. Furthermore, unlike a prenup where both future spouses are involved and have to sign the document, a trust is easier on the relationship since the future spouse plays no role with the trust and needn’t sign anything with respect to the trust.

Another prenup alternative is to transfer assets before marriage into an entity, such as a limited liability company or limited partnership. In Texas, although a spouse’s outside ownership interest in a partnership is marital property, assets owned inside a partnership, as well as income earned but undistributed, aren’t divisible upon divorce. Contrast this with income earned on separate property that was not placed inside an entity or trust. Income on a Texas spouse’s separate property is community, whereas income accumulated in the entity or trust is non-marital property. It’s easy to see the substantial benefits prenup alternatives can provide.

Can you achieve all the protection you need through prenup alternatives and avoid the need for a prenup? There are certain protections that still require a prenup, but perhaps it could be a scaled-back prenup. Those entering into second marriages may need to address obligations to former spouses. A child from a prior relationship requires special planning to diminish the risk of later friction between the child and a stepparent. If a spouse is in a high-liability-risk profession, a prenup can provide an added layer of protection for the other spouse’s property. The prenup can also specify how assets are divided when a marriage ends, whether by divorce or by a spouse’s death. In addition, if assets were transferred before marriage to an entity, once the entity makes distributions, the distributions are generally treated as community property. A prenup can override that treatment and characterize those distributions as separate property. Therefore, many do both a prenup and a prenup alternative (sort of a belt and suspenders approach). However, if the primary goal is to only protect certain family legacy assets, sufficient protection can often be achieved by only doing prenup alternatives.

In the Family Business magazine article “In a Divorce, Who Gets What?,” Jon Moore discusses the Amazon divorce of Jeff Bezos and MacKenzie Scott. Scott received a 4% stake in Amazon, valued at $38 billion, but agreed Bezos could retain voting control over her shares. Moore describes a three-step process to protect the shares of stock in a family corporation: (1) put title to the shares in a spouse’s name as separate property (a “belt”); (2) declare in a prenup that the family business is separate property, including any future income or growth in value of the business (“suspenders”); and (3) hold the business in a corporation with a Shareholders’ Agreement specifying that a divorced spouse cannot be a shareholder of the corporation (a “second belt”). Many family corporations have a buy-sell agreement providing that if a divorcing spouse acquires a right to stock, that spouse must sell the stock back to the family at a pre-agreed price. Moore adds that another tool is to transfer the stock to an irrevocable trust, as a prenup alternative, as we suggested above.

As is evident, there are multiple techniques and considerations in deciding how to best protect family assets. It’s not a “one size fits all.” However, with the grim statistic that about half of first marriages in the United States end in divorce, pre-marital planning to protect family assets is the responsible thing to do. The Blum Firm would be honored to help you weigh all the options and decide what is best for your family.

Marvin E. Blum

Prenups: How to Achieve the “Good” But Avoid the “Bad” and the “Ugly”

February 8, 2022

In this week’s Family Legacy Planning email, we continue with the theme that we’re in “the year of the wedding.” Over the last two weeks, we’ve focused on the impact of marriages on a family’s human capital. We identified “hot button” issues related to wedding planning and bringing a new member into the family. If not handled carefully, those hot buttons can create fires in family relationships and disturb the emotional well-being of family members, setting a family’s human capital ablaze. As estate planners, our mission is to help families steer clear of those fires and preserve healthy, harmonious relationships.

When a couple plans to marry, there is a tension between preserving harmony at all costs versus addressing necessary financial matters. That tension can make you feel like you’re walking a tightrope. Though it’s tempting to avoid the topic, protecting family assets is an important part of estate planning. Families work hard to create financial security. There is also an emotional attachment to certain family assets, such as a family business, heirlooms, or other legacy assets. It’s a valid goal to preserve those assets and protect them from division by a family court upon the unfortunate incident of divorce.

The purpose of a prenuptial agreement (a “prenup”) is to clarify certain items in order to prevent (or at least diminish) disputes down the road. What can a prenup do? Prenups can clearly identify the separate property assets each party brings into the marriage. Under Texas law, income earned on those assets will be community property. However, a prenup can override that law and provide that income earned on separate property assets will remain separate. Prenups can also address how to treat wages, retirement plans, debts, financial responsibilities, tax filings, homestead rights, and division of assets/spousal support upon death or divorce. These clarifications can be especially critical if either spouse comes into the marriage with children, in order to reduce the risk of later disputes between those children and a surviving stepparent. A prenup can even address non-financial issues such as child-rearing, religious upbringing, division of household responsibilities, etc.

As wedding hot topics go, it’s easy to see that a prenup may well be the hottest. So let’s explore some prenup tips to help keep it from becoming a potential tinderbox.

• Start the prenup process early, long before the wedding day.
• Complete the process well in advance of the wedding.
• Each party is well-advised by his or her own attorney.
• Let the lawyers do as much of the talking directly with each other as possible.
• Provide a full disclosure of each party’s finances, or get an informed, voluntarily-signed waiver.
• Note that a prenup is about more than property division upon divorce; it also can protect one spouse’s assets from claims that might arise against the other spouse, such as an auto accident or a medical malpractice claim.
• Avoid sharp dealing, overreaching, harsh negotiation.
• Establish a “family policy” that all marrying couples have a prenup, ideally long before anyone gets engaged.
• Try to achieve as many property protection goals as possible through a “prenup alternative.”

A prenup alternative involves the use of irrevocable trusts and entities to protect assets. In next week’s email, we’ll dive into prenup alternatives and explore how estate planning can convert what would’ve been “marital property” into “non-marital property.”

We are not suggesting that a prenup can be completely painless. We are not naïve; prenups are not a romantic topic. However, by following these best practices, our mission is to help you keep the temperature cooler and keep as much focus as possible on the loving relationship.

Marvin E. Blum

Tips to Onboard In-Laws into Your Family

February 1, 2022

As pointed out last week, we’re in the “year of the wedding.” Our focus last week was on the risks weddings pose on protecting a family’s human capital. Human capital is one of the five key components of a family’s wealth (along with intellectual, social, spiritual, and financial capital). Human capital consists of the individuals who make up a family, celebrating each one’s personal identity, self-worth, and well-being. Marriage adds a new member to the family, so it instantly impacts the make-up of a family’s human capital. If you engage in a thoughtful process to welcome in-laws, their impact on the family’s human capital can be positive. But if you’re not careful, bringing a new in-law into the family can be disruptive to the family’s human capital.

Put yourself in the shoes of the new son-in-law or daughter-in-law. Most of us have been there at some point. Remember how it feels. There’s no getting around the fact that in-laws grew up in a different home, with a different set of rules, and on some level, different values. It’s natural for the new in-law to feel like an outsider. When the family makes efforts to welcome the new member and make them feel like a valued member of the team, you improve the odds of successfully incorporating that in-law into the family. Taking steps to strengthen the bond with in-laws pays enormous dividends, especially when you consider that they will be parenting the next generation of your family. The continued success of your family’s human capital depends on it.

When I started out as an estate planning lawyer over 40 years ago, the trend was toward secrecy and a more closed relationship between the older generation (Generation 1 or G-1) and younger generations (G-2 and G-3). This was especially true when it came to money and a family’s business affairs. This was even MORE especially true between G-1 and SPOUSES of G-2. The world is a different place today. No matter how hard one may try, there is little to no privacy. We need to embrace the reality that G-2 and G-3 (and their spouses) have ways to find out much of G-1’s business. What’s also true is what they don’t know, they’ll make up. Such behavior fuels misinformation and a communication breakdown. Rather than hide from today’s expanded access to information, the smarter course is to accept it and adopt an open approach that carefully manages the communication flow.

Along with the new reality of more “open” rather than “closed” relationships, there is also a new style of estate planning. The “new age” of estate planning is holistic. It goes way beyond just drafting Wills. The Blum Firm has expanded our offerings to help families establish a family governance structure. Such a structure contains policies to foster strong family bonds, particularly with new in-laws. In particular, your family governance system will oversee a family meeting process that includes these elements:

• Adopting an orientation process for in-laws and for kids reaching adulthood (multi-step, not through a firehose, so as not to overwhelm)
• Gradually educating family members on the family’s business, estate planning, and wealth (all five capitals, not just financial)
• Regularly reaffirming the family mission statement, values, and vision, allowing for new input and periodic updating
• Creating an avenue for continually updating the family on new developments and important decisions
• Establishing open channels of communication, feedback, and idea sharing
• Procedures for group decision making, voting, and resolving conflicts
• Planning shared experiences (which includes having fun together!) to build relationships

Granting in-laws a backstage pass to the inner workings of the family will go a long way in making them an insider instead of an outsider. Rather than have them learn through haphazard methods, guesswork, and “pillow-talk” with a spouse, create a thoughtful structure. The Blum Firm would be honored to help you create a system to manage the communication flow. One final tip: This is family, not business, so we know you’ll deliver it with love.

Marvin E. Blum

It’s the Year of the Wedding

January 25, 2022

I was visiting with close friends recently about their daughter’s upcoming wedding, and they referred to an article they’d read describing 2022 as “the year of the wedding.” Due to so many postponed weddings during COVID, the 2022 calendar is jam-packed with weddings. Question: What do weddings have to do with estate planning and family legacy planning? Answer: A lot!

When I was studying tax law and estate planning at UT Law School over 40 years ago, I never imagined I’d one day be advising families on so many issues pertaining to marriage. I’ve written on the topic, I give speeches on the topic, and I regularly advise clients on the topic.

The ties between marriage and estate planning are numerous. The most obvious has to do with trust and pre-nuptial (“pre-nup”) planning to preserve and protect family assets. But as a follow-on to last week’s email about protecting all 5 “capitals” (not just financial capital), my focus today is on the impact of marriages on human capital. As I elaborated last week, author Jay Hughes distinguishes between quantitative estate planning (to protect financial capital) and qualitative estate planning (to protect human, intellectual, social, and spiritual capital). Family “wealth” is comprised of all five capitals.

Hughes defines human capital as the individuals who make up the family, including each one’s physical and emotional well-being. It’s easy to imagine how a stressful wedding scenario would disrupt family relationships and the emotional well-being of family members. Yet even in the most harmonious situations, wedding planning puts stress on family relationships. Healthy relationships are the glue in maintaining a family’s stability and sustaining a family’s wealth long-term. The estate planner can be an objective voice of reason when challenges emerge.

Consider the impact these hot-button issues could have on family ties:

• Cost of the wedding—Establish a budget (and then if you’re realistic, you should secretly double it in your head). The movie Father of the Bride warns how tempting it is to bust the budget. Caution against the wedding becoming bigger than the marriage. When our daughter Lizzy married, we asked her to identify her top three priorities. She chose music, photography, and a fairy tale Manhattan venue. We kept all other costs under control.
• Determine who pays for what—Bride’s family, groom’s family, or the marrying couple. A wedding is a major financial endeavor akin to two strangers entering into a business partnership. Some Orthodox Jews adhere to the FLOP rule: the groom’s side pays for Flowers, Liquor, Orchestra, and Photography. Clarify upfront what costs each will cover.
• Who calls the shots? Though some are tempted to follow the other “Golden Rule,” a wedding isn’t necessarily a situation where “he who has the gold rules.” With the stability of a family hanging in the balance, the stakes are much higher.
• Invitation list—Do the math. A 400-person wedding doesn’t mean the bride’s parents can invite 400 guests. That’s 200 couples, perhaps 100 for the bride and 100 for the groom. After inviting family members, the bride’s friends, and the groom’s friends, parents will likely be left with a small number of invitations for their friends.
• Pre-nup planning—As hot topics go, this may be the hottest. The Blum Firm has substantial expertise in this area. Be on the lookout for information in upcoming emails about pre-nups as well as “pre-nup alternatives.”

Above all, remember that “post-wedding” matters more than “pre-wedding.” Set aside any hard feelings and support the new couple. They will be parenting the next generation of your family. Embrace your new in-law and welcome him or her to the family. In coming weeks, we’ll give tips on onboarding in-laws.

Stay tuned for more wedding wisdom in this “year of the wedding.”

Marvin E. Blum

Family Wealth: How to Keep “It” in the Family

January 18, 2022

Over the last few weeks, I have drawn lessons from my brother’s death to urge everyone to do an estate plan check-up. As I emphasized last week, in reviewing your estate plan, I recommend you do so not only with an eye for how it performs financially, but to consider how it performs in all five of the capitals: Human, Intellectual, Social, Spiritual, and Financial.

To describe the five capitals, I will draw from the teachings of my hero Jay Hughes in his most recent book, Complete Family Wealth. Hughes explains that in the title of his earlier book, Family Wealth: Keeping It in the Family, the word “it” is not money. “It is the family’s qualitative wealth—its human, intellectual, social, and spiritual capital—in addition to its quantitative, financial capital.” Financial is only one-fifth of the wealth package. He quotes a grandmother who recognized the distinction when she said, “Our family has always been rich, and we’ve sometimes had money.”

To help you assess how your estate plan measures up on all five components of wealth, here’s how Jay Hughes defines them:

• Human Capital: Each family member’s physical and emotional well-being, including each one’s ability to find meaningful work.
• Intellectual Capital: The knowledge gained through life experiences, whether learned from academic, career, or artistic achievements, including an understanding of family finances.
• Social Capital: The relationships family members have with each other and with their communities, including giving of your time, talent, and treasure to society.
• Spiritual Capital: Understanding that as a family, we share an intention (or shared dream) that transcends our individual interests, whereby we embrace humility, gratitude, traditions, as well as whatever a family’s religious beliefs may be.
• Financial Capital: A family’s money and property, different from the other capitals, yet important in helping a family cultivate those other four qualitative capitals.

As you review your estate plan, ask if it reflects the family’s mission. Does it include elements to cultivate all five of the capitals? Consider ways to beef it up, if necessary, to foster mentoring of heirs, education experiences, philanthropy, preserving a family’s values and dreams (perhaps as expressed in an “Ethical Will” or Legacy Letter to your heirs).

My wife Laurie has a beautiful, innate understanding of the distinction between financial wealth and qualitative aspects of wealth, reminding me that “money’s not the right way to keep score in life.” I’m a lucky fellow to share life with someone who gets “it.” Dennis Lee Simon got “it” too. My friend John Hodge carries with him Dennis Lee Simon’s obituary, which I’m sharing here. When you read Simon’s obituary, you’ll see that in his short 34-years, he discovered that success in life isn’t about money, but about family, relationships, and faith. As he put it, “Nothing else makes much sense.”

I’ll close with one more story of a friend of mine who also got “it.” In paying a farewell visit to say goodbye to my dear friend Ray, he unwittingly shared the concept of wealth being both quantitative and qualitative. Ray’s final words to me: “Can you believe I amassed a $15,000 IRA? I never thought I’d have that kind of money. I’m also grateful that my entire family gathers here every Fourth of July. I hear some families don’t get along with each other and do things like that.” Such simple words, yet so much wisdom is packed into them.

The Blum Firm would be honored to help you create an estate plan that keeps “it” in the family.

Marvin E. Blum

Some Final Reflections From My Brother’s Death

January 11, 2022

When I began writing these weekly Family Legacy Planning posts over a year ago, I had no idea where this would lead. The feedback has been extremely rewarding. I have always loved to teach, and my plan was to give guidance based on my 44-year career as an attorney and CPA. What I discovered was that the posts where I shared personal stories elicited the most reaction. People encourage me to share my personal reflections. That shouldn’t surprise me. After all, estate planning is a deeply personal endeavor.

A few weeks ago, I opened the door into the topic of what I learned from my brother Irwin’s sudden death from pancreatic cancer. Surprisingly, I discovered I had suppressed a lot of my grief. Sharing this has been therapeutic for me. As my best friend Talmage Boston comforted me: “Some things in life are extremely hard to endure—but they deepen our character and our insights about life.” So true. At your urging, I will dive a little deeper into those insights.

Irwin’s death had a profound impact on me. As an estate planning lawyer, I was accustomed to dealing with death. However, the concept was always somewhat abstract for me. Irwin’s death made it real. In fact, I divide my law practice into two timeframes: (1) before Irwin died, and (2) after Irwin died.

More than anything I’d ever learned in school, seminars, or law practice, experiencing a loved one’s passing made me realize how much estate planning matters. I recently shared the observation that estate planning documents are not just paper. The structures and processes these documents create impact lives. By carefully crafting a plan, you can enrich lives. You can create responsible, empowered heirs and not trust babies. Such a plan fosters a powerful legacy that lives on long after you’re gone.

I’ve heard others sum up the value of estate planning in various ways:

• My mentor Tom Rogerson of GenLegCo teaches: “Failing to plan is planning to fail.”
• Planning advisor Kate Flume emphasizes: “Thoughtful estate planning trumps investment returns.”
• My TIGER 21 chair Jack Mueller asserts: “The greatest investment return comes from doing proper estate planning.”
• For investors fearing a bear market, the worst bear market occurs 9 months after death by unnecessarily paying a 40% estate tax that could’ve been avoided with proper planning.

As I’ve shared repeatedly in this email series, the returns from good estate planning are not only financial. In fact, financial rewards represent only one of the five capitals, summarized brilliantly by Jay Hughes in Chapter One of Complete Family Wealth: Human Capital, Intellectual Capital, Social Capital, Spiritual Capital, and Financial Capital. A thoughtful estate planning generates a legacy for your family in all five capitals.

I’ll close by once again thanking Irwin for teaching me the real value of my career, as I aim to guide clients in planning not only their estates but also their legacies. Irwin lives on in my heart. I cherish our childhood memories, like gathering discarded Christmas trees from all the neighbors’ yards to build a fort in our backyard, then dumping a mass of Christmas trees on our front curb (imagine the image as the only Jewish house in our neighborhood!) As the picture reflects, Irwin’s with me when I hike in the Rocky Mountains. He’s with me when I savor a slice of chocolate cream pie (his last enjoyable bite). He’s with us when we sit on the bench his wife Lea Ann dedicated in his memory at Airfield Falls in Fort Worth, looking out on a majestic waterfall that he and Lea Ann loved. Irwin lives on.

Here’s encouraging everyone to take a good honest look at your estate plan and imagine it in action after you’re gone. The Blum Firm would be honored to help you pass down success in all five capitals.

Marvin E. Blum

New 2022 Estate Planning Numbers—Time for a Tune-Up

January 4, 2022

Over the last two weeks, I shared lessons learned from my brother’s unexpected death, including the need to take your estate on a “test drive” to see how it runs if you pass away today. All too often, we discover surprises that can be fixed if we catch them before death. Expanding on that theme, New Year’s is the ideal time to do an estate planning check-up.

With the arrival of 2022 comes the opportunity to take advantage of an increase in some important numbers:

• The lifetime estate/gift tax exemption is now $12,060,000 per person, an increase of $360,000 per person. A married couple who used their full exemptions prior to 2022 can now transfer an additional $720,000 out of their estates. Doing so saves the 40% estate tax on the amount transferred, plus saves the 40% tax on any growth in those assets between now and the date of death.
• The annual exclusion for gifts rises from $15,000 to $16,000. You can now make annual gifts of $16,000 to anyone and remove those assets from your estate without having to eat into your lifetime exemption. A married couple can join together and make gifts of $32,000 to as many people as they wish.

I want to share an article I wrote that was recently published, as it’ll be helpful in doing an estate planning review. The article is geared toward advisors, but it also speaks to each of us as we dust off our estate plans. The article is entitled “Estate Planning for 2022: Questions to Ask Your Clients,” and it addresses these ten questions:

1. Do you own anything in your name (other than retirement accounts)?
2. After you’re gone, will your retirement assets be protected?
3. If you died right now, would your children’s inheritance become divisible upon a divorce?
4. Have you taken advantage of the doubled estate tax exemption?
5. Can you have your cake and eat it too?
6. Do you have any low basis assets?
7. Do you love your grandkids equally?
8. Do you have a “red file?”
9. Do you have a business succession plan in place?
10. Are you worried an inheritance will ruin your children?

Here’s a link to the article. Please note that the explanation under question 4 refers to a $23,400,000 estate tax exemption for a couple, but as pointed out above, that number is now $24,120,000. Don’t forget that the doubled exemption sunsets in 4 years, so any exemption you haven’t used by December 31, 2025 declines by about $6,000,000 per person at the stroke of midnight. Cinderella’s coach will turn back into a pumpkin. Now is the time to “use it or lose it.”

The Blum Firm would be honored to help with your estate planning tune-up. May 2022 be a productive and fulfilling year!

Marvin E. Blum

Lessons from Irwin’s Death: Take Your Estate on a “Test Drive”

December 28, 2021

In last week’s Family Legacy Planning email, I revealed how my brother Irwin’s death was a wake-up call in so many ways. I shared how death often comes without notice. As I’ve shared before, not only do “you only live once” (YOLO), but also “you only die once” (YODO), so you have only one chance to get it right. The key message is to BE PREPARED and have your affairs in order. Death, especially when unexpected, is viciously hard on your family. Don’t make it even harder by leaving them unfinished business.

When a client dies, we immediately embark on the details of estate administration. We gather legal documents, learn how bank accounts are titled, find out the beneficiary of life insurance and retirement plans, and determine to whom everything passes. All too often, we discover surprises:

• A bank account or brokerage account that pays on death outright to an unintended person, instead of passing through the Will to a trust with built-in protections
• An outdated beneficiary designation that leaves life insurance or retirement assets to the wrong recipient
• Documents naming an executor, trustee, or guardian for your minor kids you wish you’d changed
• Bequests that should’ve been added or omitted
• Lack of instructions on how to distribute personal effects, which could have helped avoid some painful fights among heirs.

We usually discover these surprises within days of a loved one’s death. Had we only known before their passing, we could’ve easily and quickly fixed them. That brings me to my core message: by taking your estate on a “test drive,” you look at how your plan runs as if you passed away today. Now you have a chance to make things right. It puts you in the driver’s seat of your estate plan.

If your estate planning documents have been sitting on the shelf for a while, now’s the time to do a “pre-death audit” or test run around the track. Red flags on the course include the following:

• Documents drafted more than four years ago
• Significant life events, such as marriage or divorce, for you or your family members
• Serious health challenges
• Newborn children or grandchildren
• Bank accounts set up to “pay on death” or pass by “right of survivorship,” circumventing your Will.

The Blum Firm can help you perform the test run and then assist with any needed tune-up to your estate plan. This sounds like a good New Year’s Resolution to me.

Wishing you a New Year that’s happy and HEALTHY (and boy has that word taken on a new significance!),

Marvin E. Blum

What I Learned From My Brother’s Death

December 21, 2021

At holiday time, our minds naturally turn to family, especially memories of times with loved ones no longer with us. While in this reflective mood, I want to share a story of my dear brother Irwin. Here are some lessons we can all learn from Irwin’s untimely death from pancreatic cancer:

• On your deathbed, your priorities shift to what really matters, and we realize all of the day-to-day “stuff” we worry about is just “stuff.”
• We don’t always have much (if any) warning of impending death.
• Estate planning documents are not just paper. They have a real impact on lives.
• After we’re gone, our legacy can live on in a very powerful way.
• Now is the time to do a “test drive” of your estate plan to make sure you’ve dotted all the i’s and crossed all the t’s.

Please indulge me to tell the story of Irwin’s passing. Here’s a guy who lived a model life of good health (no smoking, no drinking or drugs, exercised regularly, ate a healthy diet, not overweight). Irwin was rarely sick. One Friday evening almost five years ago, he called to tell us he thought he’d broken his foot. He was heading to a neighborhood clinic for an x-ray, lamenting that he’d soon have to endure the inconvenience of a cast on his foot. We urged him to go instead to a local hospital emergency room to meet an orthopedic doctor friend of ours. X-rays revealed that his foot was not broken, but the pain was coming from blood clots in his calf. Within hours, we discovered that there were blood clots throughout his body, emanating from his pancreas. We knew what that meant, having lost my father to pancreatic cancer 14 years before.

Irwin faced this diagnosis with the most amazing strength and courage imaginable. Doctors recommended no treatment, as the cancer was already too advanced, and Irwin went home with his wife Lea Ann and into hospice care. Irwin declined rapidly, but his spirit stayed strong. He even maintained his sense of humor, kidding with his buddies who surrounded his bed daily. His concern was never about himself, but about taking care of his loved ones. He wasn’t worried about his own health, but his focus was now on my health, aware that I have two close relatives (a father and a brother) both succumbing to pancreatic cancer. Doctors wanted to perform genetic testing on Irwin to be useful in assessing my own risk. Irwin held onto life just long enough for the kit to arrive so he could give his blood for my well-being. Only hours after giving me that gift, Irwin died. The journey from diagnosis to death was a mere two weeks. He was gone at age 65.

Words can’t begin to express my love and gratitude to Irwin. He gave so much, throughout his whole life, and his selfless act on his deathbed was just another example of the “mensch” he was. I was blessed with good news from both Irwin’s genetic testing and my own genetic testing. I still take every precaution and am enrolled in a program at UT Southwestern Medical Center aimed at early detection, should a problem arise. I am beyond grateful.

My message to everyone is to be prepared. It’s human nature to procrastinate when it comes to dealing with unpleasant things. At this holiday season, please accept a gift from Irwin. Let’s fight the temptation to postpone the things we need to do: express love, do things that bring you joy, and engage in planning to create a lasting legacy for those we will one day leave behind. Please allow me to suggest that your new year’s resolution list include an estate planning checkup. In the coming weeks, I’ll expand on the lessons learned from Irwin and provide more tips for that checkup.

Wishing all a joyful and meaningful holiday season,

Marvin E. Blum

Checklist to Help Kids Stay Off Drugs

December 14, 2021

Last week’s Family Legacy Planning email contained a quote that stirred up attention. Statistics show that having regular family dinners actually reduces the risk of kids turning to drugs. This finding is based on research at Columbia University’s “Partnership to End Addiction,” founded by Joe Califano.

The 18-year research project studied the link between the frequency of family dinners and teens’ substance abuse. Kids who have dinner with their parents at least 5 times a week are far less likely to smoke, drink, or use drugs. The risk of addiction increases dramatically for teens who have fewer than 3 family dinners per week. Califano explains that “the magic that happens at family dinners isn’t the food on the table, but the conversations and family engagement around the table… Family dinners are the perfect opportunity when teens can talk to their parents and parents can listen and learn.” Columbia’s research is summarized in the White Paper “The Importance of Family Dinners VIII” available here.

It’s important to start family dinners while the kids are young. The research revealed that “a child who gets through age 21 without using illegal drugs, abusing alcohol or smoking is virtually certain never to do so.”

Of course, there are no guarantees. However, it’s hard to ignore these powerful research findings. In her book How to Make Your Family Business Last, Mitzi Perdue provides this checklist for helping kids avoid substance abuse:

• Be a good example.
• Keep dangerous prescription drugs out of their reach (almost half of addictions start from the family medicine cabinet).
• Teach kids early on that you consider substance abuse to be morally wrong and stupid.
• Choose a middle school and a high school that enforces a drug-free policy.
• Attend religious services (kids who do are 3 times less likely to smoke and drink).
• HAVE DINNER TOGETHER at least 5 times a week.

I once attended an international conference for large Family Offices. They covered investing, tax planning, estate planning, educating heirs, but the one topic that received the most attention shocked me. It was substance abuse. Almost every family deals with addiction at some level. Consider adhering to these tips, especially the idea of regular family dinners. It’s certainly good food for thought, and perhaps the makings of a good New Year’s resolution!

Marvin E. Blum

What Are Your Rose and Thorn This Week?

December 7, 2021

Two weeks ago, our Family Legacy Planning series focused on 20 questions for your Thanksgiving table talk, prompting last week’s email to continue family story telling during holiday meals. The volume of feedback from those two emails tells me there’s a great level of interest in telling family stories. At your urging, I’m diving deeper into the topic of family table talk.

Robyn Fivush explores what’s so special about storytelling at the dinner table in her study The Importance of Family Dinnertime. “The dinner table is the perfect time for a busy family to come back together at the end of the day, to tell each other stories of their daily experiences and to re-connect as an emotionally bonded family.” Fivush breaks the stories into two categories: (1) “Today I…” stories where each tells something that happened during the day, and (2) Shared Family stories recalling favorite memories of a shared family experience, such as a trip or outing. Both are important, as every family member at the table can participate, regardless of age.

Fivush researched these conversations at the Family Narratives Lab and came to this surprising conclusion: “Adolescents from families that told more stories, both ‘today I…’ stories and shared family stories,… showed higher self-esteem, higher sense of social competence, higher academic competence, and showed few internalizing (anxiety, withdrawal, depression) and externalizing (aggression, substance abuse) behavior problems.” Why is that? Children from story-telling families build tighter family bonds, feel emotionally closer to family, and develop a sense of security and belonging.

Most of the stories are positive, but even talking about negative or challenging experiences is valuable. Fivush continues: “Use this as an opportunity to understand your children’s feelings, and to help them gain some perspective on these difficult events. Sharing sad events helps your children understand they are not alone.”

In the Blum family, we have discovered a way to expand on the “today I…” theme that works for family members of all ages. At the weekly Shabbat dinner table, each person gives their “rose” and “thorn” highlight of the week. We start with the youngest (even including the babies, whose older sisters answer for them), and keep going till we get to the old man Marvin. Everyone gets a voice at the table. My son-in-law Ira modified the rules recently to prevent the negative experiences from overpowering the positive ones. In order to announce your thorn, you have to first give THREE roses. You’d be amazed at the wisdom we all learn from these weekly highlights. Perhaps it would enrich your family experience too, while also giving everyone at the table an uninterrupted chance to talk. Why not give it a try!

Marvin E. Blum

Holiday Season—The Perfect Time for Storytelling

November 30, 2021

Thanks for the super feedback from last week’s email about the 20 question “Do You Know?” scale. That email generated the all-time best response in my Family Legacy Planning series. I used these questions at my own Thanksgiving table, and it prompted a terrific round of storytelling. The best way to teach younger generations about their family heritage is by telling stories. People forget statistics, but they remember stories for a lifetime. Dinnertime during the holidays is a perfect time to tell these family stories.

The New York Times columnist Bruce Feiler asserts: “The single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.” Author Mitzi Perdue concurs: “Stories tell us who we are and where we fit in… Families that spend time together and share their family stories are likely to be high-functioning families.”

Psychologist Marshall Duke explains: “There are heroes in these stories, there are people who faced the worst and made it through. And this sense of continuity and relatedness to heroes seems to serve the purpose in kids of making them more resilient. Ordinary families can be special because they each have a history no other family has.” Sharing stories of ancestors who conquered adversity gives a kid confidence that he too can overcome obstacles when (not if) they arise.

I’ll share a story from my own lineage that gives me strength. When my mother’s family was escaping Russia to come to America just prior to the Holocaust, her Aunt Rachel gave birth to a baby boy Morris during a stopover in Poland. Baby Morris was a Polish citizen; the rest were Russian citizens. When they arrived at Ellis Island, the quota for Polish citizens was full. Aunt Rachel, her husband Uncle Avrom, and baby Morris had to stay on the ship and go to Cuba. The rest of the family was admitted to the US. Aunt Rachel and her family made a good life in Havana until Castro came. Once again, they lost everything and even were forced to live in a small section of their home so strangers could occupy the rest of it. Years later after Uncle Avrom died, Aunt Rachel managed to escape to Miami, leaving everything she had behind for the second time in her life. But, Aunt Rachel made the best of it. Though elderly, she added English to the list of languages she spoke (Yiddish, Spanish, Russian) and made another good life for herself.

Knowing that I descend from survivors like Aunt Rachel helps me get through hard times. Every family has stories. The Emory University Family Narratives Project confirms that “family stories seem to be transferred by mothers and grandmothers more often than not and that the information was typically passed during family dinners, family vacations, family holidays, and the like.” These stories lead to “high levels of cohesiveness” and a strong sense of “intergenerational self,” which in turn leads to personal strength, moral guidance, increased resilience, and better adjustment.

During this holiday season, discover your own family narrative and share it with your loved ones.

Marvin E. Blum

20 Questions for Your Thanksgiving Table Talk

November 23, 2021

Here’s a suggestion for the conversation at your Thanksgiving table: use the time to discuss the “Do You Know?” scale. Arming your family with answers to these 20 questions reinforces family bonds and helps heirs become more resilient. This assertion is based on research by Dr. Marshall Duke and Dr. Robyn Fivush, psychologists on the faculty at Emory University, developers of the 20 question “Do You Know?” list.

This thesis was further tested and confirmed by Bruce Feiler, author of The Secrets of Happy Families. After years of research and interviews, Feiler arrived at this startling conclusion: “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem and the more successfully they believed their families functioned. The ‘Do You Know?’ scale turned out to be the best single predictor of children’s emotional health and happiness.”

Enjoy a lively and thought-provoking table conversation with the help of these 20 questions:

1. Do you know how your parents met?
2. Do you know where your mother grew up?
3. Do you know where your father grew up?
4. Do you know where some of your grandparents grew up?
5. Do you know where some of your grandparents met?
6. Do you know where your parents were married?
7. Do you know what went on when you were being born?
8. Do you know the source of your name?
9. Do you know some things about what happened when your brothers or sisters were being born?
10. Do you know which person in the family you look most like?
11. Do you know which person in the family you act most like?
12. Do you know some of the illnesses and injuries that your parents experienced when they were younger?
13. Do you know some of the lessons that your parents learned from good or bad experiences?
14. Do you know some things that happened to your mom or dad when they were in school?
15. Do you know the national background of your family (such as English, German, Russian, Chinese, and so on)?
16. Do you know some of the jobs that your parents had when they were young?
17. Do you know some awards that your parents received when they were young?
18. Do you know the names of the schools that your mom went to?
19. Do you know the names of the schools that your dad went to?
20. Do you know about a relative whose face “froze” in a grumpy position because he or she did not smile enough?

The Blum Firm wishes you a meaningful Thanksgiving celebration with your loved ones.

Marvin E. Blum

How Do You Choose What Causes to Support?

November 16, 2021

In last week’s email, I shared my views on the importance of philanthropy in estate planning. I described the estate planning process as a menu with a main course, appetizers, and a dessert. Not surprisingly, philanthropy is the “dessert” on the estate planning menu, after ordering a main course (for you and your spouse’s needs) and appetizers (to provide for your kids and other loved ones). There is a “two-fer” benefit to philanthropy, as it not only helps others, it also provides powerful “glue” in keeping a family unified as they come together to create a giving legacy.

I received feedback asking me to share tips on how to choose what causes to support. Lady Bird Johnson famously said she selected causes that “make my heart sing.” For her, that included beautification and wildflowers, especially along America’s highways. For Omaha businessman Walter Scott, Jr., good friend of Warren Buffett, his focus was on youth. “I have nothing against old people. I am one! But I believe society will get the most bang-for-the-buck if I invest in things that help us produce educated and productive citizens.” Hence, Scott was a major donor to the University of Nebraska.

I was asked to reveal my own causes. I share similar philosophies with Lady Bird Johnson and Walter Scott, Jr. I look for causes where my charitable dollars and volunteer hours not only make my heart sing, but they also “move the needle” and have a meaningful impact. As the photo reveals, I also have a personal passion for the arts, driven by my lifelong love of painting, as well as a passion for children and education. These priorities attract me to causes like the Fort Worth Symphony (where I was treasurer for 42 years), the Multicultural Alliance and its Camp CommUNITY, Texas Cultural Trust, Trinity Valley School, and Jewish Family Services.

I encourage you to find what “makes your heart sing.” I guarantee that you and your family will get back more than you give.

Tax Tip: 2021 is an ideal year for people considering a large cash gift to a public charity. Normally, the tax deduction for such gifts is limited to 60% of your Adjusted Gross Income (“AGI”), but for 2021 you can deduct an amount equal to 100% of your AGI. Furthermore, there used to be a “cutback” on itemized deductions for high income taxpayers, but in 2021 there is no cutback. No matter how high your income, you can deduct the full amount of your itemized deductions. Therefore, through large cash gifts to public charities in 2021, it’s possible to completely eliminate your income tax liability this year.

Marvin E. Blum

What Are You Having for Dessert?

November 9, 2021

Today, I am honored and humbled to receive the “Outstanding Advisor” award at the National Philanthropy Day celebration by the Fort Worth Metro Chapter of the Association of Fundraising Professionals.

November 15th is National Philanthropy Day. The day recognizes the great contributions of philanthropy—and those people active in the philanthropic community—to the enrichment of our world.

When asked for my views on philanthropy as an estate planning advisor, here are my thoughts:

The most gratifying part of my estate planning law practice is to help families with their charitable planning. Not only does the community benefit, but the family who is giving gets back even more than it gives. Philanthropy helps build and pass down a family legacy, providing glue to keep future generations connected. Not everyone can play a role in a family’s business or investments, but everyone in a family can be part of philanthropy.

In accepting the award, I described the estate planning process as a menu with a main course, appetizers, and dessert. The main course is planning that provides for you and your spouse. Appetizers are trusts that you create now to provide for your children and other loved ones. Then, after taking care of yourself and your family, you get to the fun part—dessert. For dessert, create a charitable vehicle such as a Private Foundation or Donor Advised Fund to benefit causes important to you and your family.

Such an estate plan provides for you, your family, and the community. Moreover, it leaves your heirs two important forms of inheritance: a traditional inheritance to provide for their needs, and a second inheritance allowing your heirs to provide for others. Through such as plan, you’ll make great headway in building a family legacy.

Marvin E. Blum

Do You Love Your Grandchildren Equally?

November 2, 2021

The last several Family Legacy Planning emails have been on the topic of giving assets to your family. While we’re on the subject of family gifts, here’s a provocative question: “Do you love your grandchildren equally?”

Suppose you have a son with two kids and a daughter with four kids. If you leave $12 million to the next generation (Generation 2 or “G-2”), that’s $6 million to your son and $6 million to your daughter. When G-2 dies, and the assets flow to the grandchildren (“G-3”), each son’s child gets $3 million, but each daughter’s child gets just $1.5 million. That’s a recipe for cousin jealousy.

To send a powerful message that you love all six grandchildren equally, here’s a simple proposal. Leave your estate plan intact, but take out a life insurance policy on your life and designate the benefit to go equally to your 6 grandchildren, per capita. For example, a $1.2 million life insurance policy would give each grandchild $200,000 at your death.

Although it doesn’t erase the possibility of jealousy, it does send the 6 cousins a clear indication that you loved all of them the same.

(Credit for this idea goes to my friend Bruce Udell of Sarasota, Florida.)

Marvin E. Blum

Tips for “Use It or Lose It” Planning and Other Gifts

October 26, 2021

Last week’s Family Legacy Planning email created quite a stir by promoting a “Now & Later” approach to inheritance—give some now while you’re alive and the rest later at your death. Many are seeking tips on how to make lifetime gifts in the most tax efficient way. Consider these ideas:

• Make $15,000 annual gifts to as many people as you wish.
• In addition, pay tuition and medical payments (including health insurance premiums) for loved ones. Payments must be paid directly to the provider.
• For larger gifts, make a gift of your $11.7 million lifetime exemption. Under pending legislation, this exemption cuts in half on January 1, 2022—“use it or lose it.” Even if the new law doesn’t pass, the exemption automatically sunsets in half on January 1, 2026, just 4 years from now.
• If you gave away your full exemption in 2020, be sure to make a 2021 gift of the additional $120,000 inflation adjustment we received in 2021 ($240,000 for a married couple).
• In order to capture the full extra exemption before it cuts in half, you have to make a gift of the full $11.7 million. The $11.7 million consists of an old half and a new half. A gift of only half first eats up the old half of the exemption, so when the new half sunsets, you’ll be left with zero exemption.
• Married couples often make these $11.7 million gifts to SLATs (Spousal Lifetime Access Trusts) in order to retain access to the funds.
• If a couple only wants to give $11.7 million and not $23.4 million, make the gift entirely from one spouse to a DGT (Defective Grantor Trust) for the kids. If the $11.7 million gift comes 50/50 from the spouses, you’ll have no exemption left after sunset. Giving the gift entirely from one spouse saves $5.85 million of the other spouse’s exemption.
• To best protect your loved ones, we recommend you create trusts to receive the gifts, protecting the gifts from creditors, divorce, and taxes at death.

If the new law passes, the deadline for “use it or lose it” planning is December 31, 2021. But, if you supercharge the gift using a “squeeze & freeze” technique, or if you add the gift to an existing DGT or SLAT, the deadline is earlier—it’s the “date of enactment” of new legislation, which could be very soon. Time is of the essence.

Marvin E. Blum

Inheritance: Give Some Now and Some Later, or Do It All at Death?

October 19, 2021

As discussed in the last two Family Legacy Planning emails, families struggle with balancing the amount to leave their kids versus the amount to leave to charity. As you settle on the amount to give your kids, the question becomes “When should I give it?” In giving assets to your kids, think about the benefits of providing some of the money to them now versus waiting until your death to leave it all to them. Consider the “Now & Later” candy approach to inheritance:

• They very likely will need it more now, in their earlier years of raising a family, than they will down the road.
• You will be here now to help guide and mentor them.
• You will have the satisfaction of seeing them benefit from your generosity.
• By spreading out the inheritance and starting now with smaller sums, your kids can learn from smaller mistakes and fare better later with larger sums.
• A gift now sends a message that you trust them, building confidence and pride that they are part of your family’s success story.

The timing of this topic ties in perfectly with current developments in tax law. If it passes, the Biden “Build Back Better” legislation greatly limits the tools available for making lifetime gifts:

• The lifetime exemption cuts in half on January 1, 2022 (just over 2 months from now), cutting back lifetime tax-free gifts from $11.7 million to $5.85 million.
• After the “Date of Enactment,” you can no longer use IDGTs (Intentionally Defective Grantor Trusts), traditional SLATs (Spousal Lifetime Access Trusts), or GRATs (Grantor Retained Annuity Trusts) to get assets out of your estate.
• After the “Date of Enactment,” you can’t make gifts to old IDGTs, SLATs, or any other Grantor Trusts (including most ILITs—Irrevocable Life Insurance Trusts) and get those assets out of your estate.
• The opportunity to do “squeeze” planning with valuation discounts goes away on the Date of Enactment.

Now is the ideal time to think about gift planning for your family, for both tax reasons and non-tax reasons. At The Blum Firm, we are honored to help you evaluate your gifting options.

Marvin E. Blum

Leaving Assets to Kids: How Much Is Too Much?

October 12, 2021

Last week’s Family Legacy Planning email created quite a stir when it raised the question of how much to leave to your kids versus charity. People struggle with finding the right balance between family and philanthropy. There is no easy answer. Given the interest, we decided this week to dive deeper into the debate. Let’s see what lessons we can learn from celebrities featured in Helen Rumbleow’s London Times article “Daniel Craig and the Curse of Inheriting.”

• Daniel Craig finds an inheritance “distasteful.” His plan for his James Bond earnings is to “get rid of it or give it away before you go” (perhaps easier said than done). He elaborates that he will not leave “great sums” to his two daughters, but he doesn’t say “no sums.” Once again, we are left to wonder what’s the right balance between kids and charity?
• Bill Gates’ plan to leave his kids “only $10 million each” was inspired by his friend Warren Buffett, and though he thinks inheritance is no favor to them, he still can’t “cut the purse strings entirely.”
• Elton John says it’s “terrible to give kids a silver spoon,” but still plans to leave his children in a “sound financial state.”
• Actor Ashton Kutcher refuses to hand out money freely, but adds: “If my kids want to start a business and they have a good business plan, I’ll invest in it.”
• Andrew Lloyd Webber stated, “I am not in favour of children suddenly finding a lot of money coming their way because then they have no incentive to work,” but in the same breath admitted he will give his children “a start in life.” How much is that?

Notice the tension in each of these examples. Parents don’t want to disinherit their kids, but they don’t want to disincentivize them either. They are trying to strike a balance. They want their kids to live a good life, but they want them to still have to work. According to Rumbelow, “the necessity of work is one of the guardrails against nihilism and self-loathing.”

The answer lies in taking steps to prepare them to inherit and then leaving the inheritance in a well-crafted trust. The Blum Firm specializes in designing trusts to help families find this balance. Trust provisions can guard against creating “trust babies” by rewarding productive behavior but withholding distributions from beneficiaries who are off track. Trustees should be charged with mentoring heirs in order to educate them and help them build self-esteem. Trust distributions should be spaced out so that beneficiaries who made mistakes with earlier distributions have a chance to get it right with later distributions. We would be honored to help your family create a trust plan that benefits and empowers your heirs, but also provides for charitable causes important to your family.

Marvin E. Blum

How Much Should I Leave to My Children?

October 5, 2021

Last week’s Family Legacy Planning email shined a light on philanthropy as glue that can hold a family together, second only to endowed family travel and retreats. When including philanthropy in your estate plan, a question arises on how much to leave to your children when you die, and how much to leave to charity. What is the right balance?

As baby boomers are on the verge of passing trillions of dollars of wealth to the next generation, a hot question is: “what impact will that wealth have on my kids?” William Vanderbilt famously said that the fortune left to him by his father “has left me with nothing to hope for.” He described inherited wealth as “a death to ambition.” In a recent London Times article “Daniel Craig and the Curse of Inheriting,” author Helen Rumbelow likens an inheritance to medicine: “give someone too much and there is an overdose effect; you kill the patient (or in this case the child) you had wanted to protect.”

In my estate planning practice, I often hear people say they plan to leave their assets to charity rather than their kids. They say that, yet that’s rarely how their estate plan reads. Typically, they still leave the vast majority (if not all) of their wealth to their kids. People struggle with finding the balance between how much to leave their kids vs charities. The question most of us ponder is “How much is too much to leave to our kids?”

An early champion of the concept of balancing an estate between family and philanthropy is Warren Buffett. Buffett famously said he wants to leave his kids “enough so they can do anything, but not so much that they can do nothing.” Note that he doesn’t advocate disinheriting his kids. His message is to leave some to family and some to charity. When I had the opportunity to ask him: “How much is the right amount to leave your kids,” he admitted that he struggles with that and frequently adjusts his plan to leave them more, as he sees that they’re capable of handling it.

From Buffett’s answer, I derive this wisdom: the right amount to leave your kids is the amount they’re prepared to receive. It’s our job as parents and advisors to prepare the next generation. Without preparation, I’ve heard an inheritance described as leaving a kid a loaded gun with no instruction manual. I realize these comments are graphic and harsh, but we in the senior generation have a responsibility to train future generations for what’s coming to them. Please join me in The Blum Firm’s mission to strengthen the family bond and take steps to prepare our heirs to inherit.

Marvin E. Blum

The “Glue” That Keeps a Family Together

September 28, 2021

In recent Family Legacy Planning posts, we referred to Mitzi Perdue, a member of both the Sheraton Hotels and Perdue Farms families, author of How to Make Your Family Business Last. Perdue offers a list of reasons her family has stayed connected, but she emphatically states that the #1 reason they’re together is endowed family vacations, and the #2 reason is family philanthropy. We addressed her bold assertion about the benefits of family travel in an email a few weeks ago on August 4. Today’s focus is on philanthropy.

Perdue emphasizes the connectivity benefits of a family coming together to volunteer and/or donate. Not everyone can be part of working together in a family business, but everyone in a family can be part of philanthropy.

Family philanthropy not only helps others. The by-product is that the one doing the giving also benefits. In my own work on causes meaningful to me, I’ve often said that I get back more than I give. Indeed, philanthropy is a laboratory for family legacy planning, as it checks so many boxes for fostering a legacy and preparing heirs.

• It’s a training ground for group decision making. Research shows that the greatest reason for family failure is lack of communication and trust in group decision making. Coming together to select causes to support trains heirs to collaborate.

• Selecting a cause that’s meaningful to the family can help a family highlight an important part of its story. For example, supporting causes in an ancestor’s country of origin or funding research into a family medical issue can preserve a family’s heritage. The Perdue family charter focuses on helping communities where there is a Perdue poultry plant, giving back to those who helped build their business.

• Setting aside funds in a family foundation allows heirs to learn about investing and how to manage money.

It’s never too early to start. Even the Rockefeller kids who received a 25-cent allowance were schooled to set aside 5 cents for charity, 5 cents to save, and spend no more than 15 cents.

The Blum Firm has an active practice creating private foundations, designing charitable trusts (such as Charitable Remainder Trusts and Charitable Lead Trusts), and helping families navigate the tax and legal rules in charitable planning. We would be honored to help your family create the philanthropic structure that’s right for you.

Marvin E. Blum

Tradition, Tradition! Your Family Traditions Matter More Than You May Realize

September 14, 2021

We are now in the Jewish High Holy Days, which always puts me in a reflective mood. Last week we observed Rosh Hashonah, the Jewish New Year, and we turn this week to Yom Kippur, the holiest day of the Jewish year. For me, holiday memories always conjure up family traditions. I can hear Tevye in “Fiddler on the Roof” singing “Tradition, Tradition!” in my brain right now. Each family develops its own traditions, and those traditions are vitally important in passing down a family legacy from generation to generation.

In our Family Legacy Planning series, I’ve been quoting Mitzi Perdue, author of Making Your Family Business Endure Across the Generations. In recent emails, I highlighted Perdue’s assertion that the number one reason her family (Sheraton Hotels and Perdue Farms Chicken) endures is regular family travel, crediting her ancestors with setting aside funds in a trust to pay for annual family trips. She also stresses the emphasis on stewardship, training kids from early on to care for the family business and pass it down stronger to the next generation.

Perdue also stresses the importance of adopting a system of Family Governance, asserting unequivocally that “successful families are intentional about family governance.” The governing system addresses how to resolve quarrels (inevitable in every family). It also establishes a framework on how the family votes on major decisions. In our June 29 and July 6 emails, we addressed the particulars of family governance.

Perdue’s next reason for family continuity really speaks to my heart, especially this time of year: Preserving Family Traditions. According to Perdue, “the more traditions, the more glue.” Traditions are the “lifeblood of a family’s identity.” Mitzi’s family even created a “What it Means to Be Us” book. Each family member writes a page in that book, answering that question with words and pictures. The book preserves important traditions and stories for future heirs. It’s also a meaningful way to onboard in-laws, helping them understand the soul of the family they’re joining.

I had an “a-ha!” moment this week reading a blog post by dear friend Karen Cortell Reisman, founder of Speak for Yourself. Karen tells the story of her late mother making 114 gefilte fish balls each year for the family’s Rosh Hashonah gathering, and teaching Karen the technique before she passed away. When Karen’s son read his mom’s blog, he contacted her and said, “I’ll make gefilte fish with you anytime!” That’s what I’m talking about in creating and passing down a family legacy. Those fish balls mean a lot more to preserving the Cortell family heritage than you might think.

Every family has its own version of a gefilte fish tradition. Renowned family governance author Bruce Feiler tells of a grandfather tossing yarmulkes (skull caps) like Frisbees onto the boys’ heads at their weekly Shabbat dinners. The Blum traditions seem to also center around holiday observance, whether it be lighting Chanukah menorahs the kids made decade ago or the taste and smell of holiday recipes handed down from my grandparents to my own grandchildren now. Through those traditions, I feel a connection to my roots, and my goal is to preserve that connection for years to come, “L’dor Vador—From Generation to Generation.”

Marvin E. Blum

Texas Now Allows 300 Year Trusts

September 7, 2021

In last week’s Family Legacy Planning email, we shined a spotlight on the concept of stewardship and Hobby Lobby founder’s legacy plan: “No one owns the tree.” Each generation is responsible for nourishing the family enterprise so it will continue to bear fruit for generations to come. The optimum estate plan is to transfer the family assets into a trust that benefits heirs yet preserves the “tree” to pass down from generation to generation. The ideal trust also provides for mentoring heirs, so they grow into responsible, educated, empowered beneficiaries who understand and embrace the family culture.

With family legacy planning now a growing trend, there is an increased appetite for trusts of longer duration. Such trusts not only protect the family “tree,” but they also provide the beneficiaries with important protections against creditors and divorce, as well as tax savings. Recognizing this trend, the Texas legislature just enacted a new law to allow trusts to last for 300 years. The new law applies to trusts with an effective date on or after September 1, 2021. If you create an irrevocable trust during your life, the effective date is the date the trust is created. If your Will or Living Trust provides for trusts that will be activated upon your death, the effective date will be your date of death.

Before this new law, the Texas “Rule Against Perpetuities” permitted trusts to last no longer than the lifetime of anyone alive at time of trust creation (known as a “measuring life” who was identified in the trust), plus 21 years. If such a measuring life was a baby who lived to 80, the maximum length of a Texas trust was about 100 years.

In the past, Texans wishing to create a longer-term trust created the trust under the law of another state (such as a perpetual trust in Delaware, South Dakota, or Alaska, or a 365-year trust in Nevada). To do so required naming a trustee in that chosen state. Texans desiring longer-term trusts now have the choice of keeping their trusts at home. There are still other protections that may favor creating an out-of-state trust, but if the only concern is duration, a Texas trust is now an option.

Estate planners are now exploring whether irrevocable trusts created before September 1, 2021 can be modified to last longer. That analysis needs to happen on a trust-by-trust basis, depending on the facts of each case. However, what is clear is that if your Will or Living Trust creates a Texas trust that activates upon your death, you should consider amending your plan to take advantage of the new 300 year term.

Marvin E. Blum

Creating a Strong Family Culture: “No One Owns the Tree”

August 31, 2021

In The Blum Firm’s Family Legacy Planning series, last week’s focus was on endowed family travel, a surprising key tip from Mitzi Perdue on how to sustain a family business. This week, we address another tip on how to build a strong family culture.

As mentioned last week, Perdue is a first-hand expert and author on this topic, daughter of Sheraton Hotels founder and wife of Perdue Farms chicken entrepreneur. Per a Dennis Jaffe study, the odds are 1 in 1,000 that a family business will last 100 years. Perdue credits her family’s success in beating these odds with the fact that her family enjoys a rock-solid family culture. That culture is instilled in kids from a young age.

In a presentation I attended, Perdue shared a number of best practices on how to create such a culture. The first tip is to teach kids the lesson of stewardship. Each generation borrows a family business from the prior generation. The founding generation (Generation 1 or “G-1”) passes the business down to G-2. G-2’s job is to steward it and pass it down to G-3, and so on. Heirs are taught early on not to spend it all. Perdue’s family lives a very comfortable life, but they frown upon extravagance and ostentation.

Warren Buffett emphasizes this same concept. When asked for tips on how to raise kids in affluence, Buffett urges G-1 to be role models for living responsibly. He stresses that our kids are watching us more than listening to us, so it’s our job as parents to live in such a way that we set an example.

To put an exclamation point on the importance of stewardship, I recall a story told to me by David Green, founder of Hobby Lobby. Green likened the Hobby Lobby business to a tree. He trained his kids that “no one owns the tree.” Each generation has the responsibility to work hard and nourish the tree, so that the tree can bear fruit. You can enjoy the fruit, but don’t harm the tree. Steward the tree so it will continue to grow and bear more fruit for future generations.

Green’s advice ties in perfectly with the use of trusts in estate planning. By transferring ownership of the “tree” into carefully crafted trusts, future generations can enjoy the fruit while preserving the tree as a long-term family legacy.

Marvin E. Blum

What Keeps This Family Connected? The Answer May Surprise You.

August 24, 2021

I attended a presentation on Business Succession Planning entitled “Making Your Family Business Endure Across the Generations.” The speaker was Mitzi Perdue, author of a recent book on this topic. Mitzi lives this topic first-hand, as her father’s Henderson family started Sheraton Hotels, and her husband’s family owns Perdue Farms, the largest producer of organic chicken in the world.

I expected the presentation to be all about corporate governance and how to set up the best structure for a business enterprise. That’s not what Mitzi talked about at all. Instead, she said the solution to having a family enterprise last lies with the family culture.

Mitzi gave a number of tips on how to create a strong family culture. I will share more of her ideas in future emails, but today’s focus is on one tip she emphasized most emphatically, a tip that may surprise you as much as it surprised me: family travel, and not just family travel, but endowed family travel. Here’s what Mitzi had to say about “endowed vacations,” the surprising solution for how to sustain a family business enterprise.

• The family travel started 130 years ago when her ancestor, John Henderson, set up a trust to pay for an annual family reunion. In her words, “the annual reunion is our safety net, the most important part of our lives.”
• Mitzi encouraged the Perdue family to also plan vacation reunions. The Hendersons travel annually on a more upscale trip; the Perdues travel each 18 months on a more modest trip. It doesn’t have to be lavish; the key is to all be together.
• Per Mitzi, if you don’t set up a trust to pay for the costs, then after Generation One dies, it lasts only a couple of years, then people go their separate ways. For a couple of years, it’s Thanksgivings, by year 5 it’s just weddings, then just funerals, and by year 10, they don’t even go to funerals.

According to Mitzi, you not only need a trust to endow the costs, but you also need a trust to provide the structure. It takes a trust so there’s a trustee whose job it is to make sure someone plans the reunions and they actually happen. This structure dovetails perfectly with the FAST (“Family Advancement Sustainability Trust”) pioneered by The Blum Firm and Tom Rogerson. The FAST is a trust that (1) provides the funds and (2) provides the leadership to make sure families continue to meet regularly. To learn more about the FAST, here’s a link to our May 2021 post on it.

As I’ve said before, “don’t let a funeral director plan your next family reunion.” Family travel is not just fun, it’s critical to sustaining a family culture, and it’s critical to the survival of a family business as well as the survival of the family.

Marvin E. Blum

Even Young Adults Need Estate Planning

August 17, 2021

Even young adults need estate planning, to which you might reply, “Duh! Of course they do. We already know that.” However, most young adults have not signed estate planning documents, thinking they’re “too young” to worry about it.

In our focus on Family Legacy Planning, we are shining a light on the concept of “holistic” estate planning, planning that goes beyond just having a will. One aspect of holistic estate planning is to see to it that every adult member of your family is protected.

I recently read an article that drives home this point: “Estate Planning for a Disrupted Life” in the July/August 2021 issue of Probate & Property magazine. It tells the story of one such young adult referred to as “S.T.,” seemingly invincible, already an accomplished professional with multiple degrees, fluent in four languages. While leaving work and walking to her car, something fell from a building and hit her in the head. The result was a “TBI”—a traumatic brain injury. Without a Power of Attorney (naming an agent to handle her financial decisions) and without a Health Care Power of Attorney (designating who speaks for her on medical decisions), S.T.’s fate was left to the courts. A court-appointed Guardian Ad Litem (a “GAL”) accepted a lawsuit settlement on her behalf, over S.T.’s objection. The trial court and appellate court sided with the GAL, but the state Supreme Court reversed, siding with S.T. It was a very messy and expensive fight.

Let’s rewind the clock and imagine that S.T. had signed simple documents like a Power of Attorney, Health Care Power of Attorney, Designation of Guardian, HIPAA Waiver, and Directive to Physicians. These five documents are part of almost every estate planning basic package, along with a Will. Instead of turning over her decisions to the court system, S.T. would have decided in advance who would be in control of her financial and health decisions, minimizing (and possibly eliminating) the court’s role.

I know, what happened to S.T. was a fluke and not likely to happen to any young adults in your family. But doing some simple documents is very wise insurance, just in case. COVID-19 taught us that even young people are vulnerable. Holistic estate planning means planning for things beyond who inherits when you die— things like family governance, asset protection planning, and planning for contingencies such as disability and other illness. Holistic planning also means seeing to it that every adult member of your family has signed a package of basic estate planning documents.

The Blum Firm would be honored to help you achieve this peace of mind.

Marvin E. Blum

Estate Planning Lessons from COVID-19

August 10, 2021

As COVID-19 continues to dominate much of our psyche, let’s reflect on some powerful ways the pandemic has impacted estate planning. In particular, let’s ponder the impact COVID-19 is having on Family Legacy Planning.

First and foremost, COVID-19 has heightened an awareness of our mortality. Playing “the waiting game” to do estate planning has always been risky. But we are now more aware than ever how fragile health is, and how precious life is. Even the young are not insulated from this health risk. Putting off planning is even riskier now.

Second, spending more time at home has provided many of us a chance to reflect on what gives our lives meaning. Creating and passing down a family legacy has a new emphasis. I interact with many “baby boomers” like me who ponder “to what end have I created this wealth, and what impact will it have on my heirs?” Now is an ideal time to write a Legacy Letter to your family.

Third, as the circle of people we spend the most time with narrowed to those in our family, we became more attuned to our family dynamics. All families have certain sensitive issues, and the tendency is to sweep them under the rug. Ignoring these issues doesn’t make them go away. On the contrary, they tend to fester, and later (perhaps after Generation One/“G-1” is deceased) they erupt like a volcano. The time to address these issues is now, especially while G-1 is here to help serve as family “glue.”

What’s the lesson learned? Let’s engage in Family Legacy Planning, starting with holding family meetings (conducted by a professional facilitator) to (1) improve communication and trust among family members, (2) provide heirs with training so they’re prepared to inherit, and (3) preserve the family’s mission, heritage, and unique culture.

What’s another lesson of COVID-19? We have learned how to “Zoom!” Although meeting in person is preferred, it’s hard to find a time and place for a family meeting that works for everyone. It’s better to meet “Brady Bunch” style by Zoom than to keep postponing the meetings until all are available.

A recent New York Times article summed up the lessons of COVID-19 with the term “YOLO” – You Only Live Once, so stop postponing meaningful experiences. That’s true, but my dear friend Karen Reisman (www.speakforyourself.com) responds with the powerful antidote: “YODO” – You Only Die Once; you LIVE every single day, but give your loved ones the gift of being prepared for the ONE day when you’re gone. The Blum Firm is honored to help you prepare for that “YODO” day and pass down a meaningful legacy to your family.

Marvin E. Blum

Preserving Family Heritage = Stronger Heirs

August 3, 2021

In last week’s Family Legacy Planning email, I shared how a recent speech I gave lead to improvements to The Blum Firm’s Red File Checklist. The Red File contains important information to pass down to your family, information that’s not in your estate planning documents (think: passwords, key contacts, caregiving wishes; but also think: lessons learned, goals for your family, (and as discussed last week) even plans for your funeral). Another idea hit me during that speech: use the Red File to write down information about your ancestors and family stories, especially stories of resilience when ancestors overcame obstacles.

Why is it important to preserve family heritage? Research shows that heirs who know more about their ancestors (names, hometowns, what they were like and what they did) actually have higher self-esteem. It is also well-established that knowing stories of resilience helps heirs remain strong and confident when adversity strikes (and that’s WHEN, not IF). Heirs who know they descend from a line of survivors are more equipped to deal with life’s struggles.

A great activity for a family meeting is for everyone to share memories of family stories. It’s a chance for everyone to participate.

As an example, please allow me to share a Blum heritage story. All four of my grandparents barely escaped the Holocaust, making it to America alive but penniless, knowing not a word of English. My grandfather used to say he left behind all his possessions except the knowledge in his head, leading to his motto: “What you put into your head, no one can ever take away from you.” From that heritage, I was raised with two overriding values: (1) education and (2) hard work. Those values made me who I am today. So when Laurie and I had a still-born baby on February 11, 1982, we knew we had the strength to survive—and when Adam was born exactly one year later on February 11, 1983, our faith was rewarded. When a tornado destroyed my law office in 2000, I also knew I came from survivors and could rebuild my law practice. When my brother Irwin died at age 65 of pancreatic cancer, I was heartbroken but knew we would carry on his legacy.

We all have stories of ancestors overcoming hardship, and we can all draw strength from those stories. Our heirs can also draw strength from those stories. Financial assets are only part of an inheritance. Let’s write down those stories and pass down that inheritance too.

Marvin E. Blum

A Parting Gift to Your Family: Write Your Own Obituary, Gather Photos, & Plan Your Memorial Service

July 27, 2021

I recently had the privilege of speaking at a Lion Street Trusted Advisors Conference in Las Vegas. My topic was the “Red File,” a roadmap of information for your family and agents to follow in four areas: your incapacity, your death, business succession planning, and passing down a family legacy. The Red File provides critical information your team needs to know in order to carry out your wishes, but this is information not contained in your estate documents. Therefore, The Blum Firm created a Red File Checklist to help you assemble this information. You can access our Red File Checklist here.

The Red File Checklist is forever a work-in-progress. We continue to add to it as new ideas come to us. While speaking in Las Vegas, the idea hit me of an important addition to the Red File: give your family the gift of planning for your own memorial service and obituary.

This idea grew out of an experience I had at a group meeting I attended for TIGER 21, a network of investors who come together to learn and serve as a “personal board of directors” for each other. One of my colleagues commented what a difficult week he just had, having lost his father-in-law days ago. He lamented the struggle of having only a couple of days to handle all the funeral arrangements, write an obituary, and gather photos for a slide show of lifetime highlights, all while coping with the heartbreak of loss.

At that point, the chair of my group gave me an assignment: over the next month, I was to write my own obituary and collect memorable photos to put on a digital file. The task was arduous, even in the best of circumstances. Imagine how much harder it would be for family members to do this on my behalf, during the first days of the grieving process. I realized that drafting an obituary (to be later updated/modified) and gathering photos was a true act of love to those we leave behind.

Click here to read my “pre-obituary.” I also created a digital file of photos that tell my pictorial life story. We’ve added the tasks of writing a “pre-obituary” and making a digital file of photos to The Blum Firm’s Red File Checklist, and I included them in my own Red File. I urge you to pause and give your family a gift of doing the same for them.

Marvin E. Blum

Marvin Blum’s Journey into the “Soft” Side of Estate Planning

July 20, 2021

This week in our Family Legacy Planning Series, I want to discuss my journey into the “soft” side of estate planning. Like most estate planning advisors, I began my career focusing on the technical and tax aspects of estate planning, what I often refer to as the “head” side of estate planning. After several decades of witnessing challenging family dynamics, often fueled by inheritances passing into unprepared hands, I began to ask what could we, as planners, do to help our client families avoid these pitfalls? My focus then shifted from all “head” estate planning to “head and heart” estate planning.

Many of our clients are hurting, and almost all worry about what impact an inheritance will have on their heirs. Estate planning advisors have skills to help, more than we realize. We also have a special seat at the table. If we don’t bring up these issues, who will?

I discussed tapping into those skills earlier this month with John A. Warnick as part of the Purposeful Planning Institute’s “Thought Leader & Industry Innovator Series.” Click on the link below to hear my guidance on how to help our client families achieve multi-generational success and pass down a meaningful legacy.

Topical outline available here.

Replay: Marvin Blum’s Journey into the “Soft” Side of Estate Planning

Marvin E. Blum

Every Family Needs Some Kind of “Family Office”

July 13, 2021

In last week’s email in our Family Legacy Planning series, we focused on how to set up a family governance system. The core document that outlines the family governance structure is called a Family Constitution. We recommend that every family create a plan for how it will operate, and then document it, just as every family business needs a documented governance structure (a Charter and Bylaws). In listing the key provisions of a typical Family Constitution, included is the need to address the structure and function of a “family office.”

A “family office” is still a fairly new concept. Over the last decade or so, successful families have prioritized creating a centralized “office” to handle all the family’s needs. For families of higher net worth, a “Single Family Office” is often the solution, where the office is dedicated to the affairs of just one family. Where the budget doesn’t allow for a single family office, there are other solutions. The most common is a “Multi-Family Office” where a team of people serve the needs of several families who share the cost. Another solution, of especially rising popularity during COVID-19 “Zoom” era, is the “Virtual Family Office.” A family advisor serves as “quarterback” and assembles a team of all the necessary players, each of whom work from their own location and meet virtually as needed, avoiding the overhead of a physical office.

Functions served by the family office include overseeing all the family’s financial needs, but the kind of family office that helps create and preserve a family legacy will do much more than financial tasks. In addition to monitoring business, investing, tax, accounting, estate planning, insurance, bill paying, property management, philanthropy, and other financial matters (what Tom Rogerson of GenLeg Co. refers to as the “right rail” of a railroad track), the modern family office also addresses strengthening family relationships, culture goals, family dynamics, psychological needs, and fostering the family’s purpose (the “left rail”). The family office plans family enrichment and education activities to serve as “cross-ties” to build communication and trust, bridging the right and left rails. The family office manager will involve all the family members in these activities, drawing from each one’s skill set so everyone feels a part of the team. There’s a role for everyone, even for those without financial acumen.

A family office is also an important part of “family glue” after selling a family business. Often, the family’s identity is lost when their business is sold, but a family office can keep the family unified around jointly managing the “family enterprise.” Moreover, it can be of major psychological benefit when the business founder is searching for a new role after the “business-baby” is sold. As I’ve heard from a number of founders’ wives: “I married him for breakfast and dinner, but not for lunch.” The founder can find continued purpose by playing a key role in the family office.

Each family needs to design the family office structure that’s right for it. There’s no cookie cutter for this, and no two will match. As Tom Rogerson says: “If you have seen one family office, you have seen ONE family office.” Regardless what yours looks like, your family will benefit from it, and preserving your legacy may depend upon it.

Marvin E. Blum

The Family Constitution: “We, the People…”

July 6, 2021

With the Fourth of July celebration just behind us, it’s a good time to reflect on governance, in this case—Family Governance. In our last email, we covered WHY it’s important to adopt a Family Governance System, and then shifted to HOW to do it. Critical to the process is for the family members to participate in the decision-making. The goal is for the family to have buy-in and feel they own the governance system they adopt.

However, the family shouldn’t go it alone. The family needs experienced advisors to guide the process, ask the right questions, facilitate the conversation, and mediate when necessary. The advisors can synthesize all the input and craft governing documents, starting with a Family Constitution, sometimes called a Family Charter. Just like our country’s constitution, the family’s is a framework of fundamental principles and ideals that determine how the family will make decisions, operate, and be governed.

Here are key provisions of a typical Family Constitution:

• Start with the Family Mission Statement, which guides all major decisions. The family may expand this section to cover the family’s core values and its vision for the future. By setting out these principles and training heirs to understand them from an early age, you improve the odds they won’t get lost with time.
• Create a governance structure, including some or all of the following:
  • Family Council of selected family members to make management decisions, similar to a company’s board of directors
  • Voting Family Members, similar to shareholders of a company, who elect the Family Council and must approve certain major decisions
  • At-large Family Members, defining those who attend family meetings along with the Voting Family Members
  • Family Advisory Board, consisting of the family’s “go-to” outside advisors (attorney, CPA, trust officer, financial advisors, other counselors)
• Identify who qualifies for each of these roles: determine the role of in-laws, step-kids, minors (at what age do they join?), former spouses after a family member dies or divorces, unmarried partners of a family member, etc.
• Set out voting procedures (quorum, decisions requiring a majority vs. super majority vs. unanimous vote)
• Procedure for resolving conflicts (a system for mediation and/or arbitration)
• Policies for educating heirs about family wealth and responsibilities (when and how)
• Process for onboarding in-laws
• Addressing behavior that leads to disqualification
• Guidelines for family meetings/retreats (how frequent, location, who plans them, etc.)
• Broad investment guidelines
• The structure and function of a Family Office
• Process for amending the Constitution

These items are merely a suggestion and not an exhaustive list. There’s no “one size fits all.” Some families will need all of these bells and whistles; some will need only part of them. The critical point is that each family should examine its needs and create a system that’s right for it. A final point: as the final bullet point above reveals, the Constitution is not set in stone. It is a living document that will evolve over time to meet the needs of an evolving family.

Marvin E. Blum

Family Governance: The Ties That Bind

June 29, 2021

In our last Family Legacy Planning email, we introduced the topic of a Family Governance System. In learning from the best practices of successful multigenerational families, we found they adopt and follow a governance structure to help them navigate the uncharted waters of family life. In order to look like the family they want to be 25 years from now, families need a procedure for making group decisions, resolving conflicts, onboarding in-laws and younger generation members, and charting out a path to achieve the family’s long-term vision. They don’t leave things to chance. That’s the WHY of creating a Family Governance System. Now let’s address the HOW.

We are all familiar with the governance structure of a business. Let’s look to that example for guidance. There are shareholders, who elect directors to set policy and strategy, who elect officers to run the day-to-day. There are board committees for special purposes. There is a set of governing documents including a charter and bylaws. Board meetings happen on an established frequency with prescribed rules for voting. All of these add up to helping strengthen a company’s core and weather through the ups and downs. The governance system makes for a strong business. Likewise, for a family to endure, it needs a governance structure comparable to that of a family business.

Ironically, it’s obvious to business owners that a company needs such a structure. However, it isn’t as obvious to most business owners that their families need one too. Many business owners feel that a strong business will keep the family tied together and unified. In actuality, it’s the other way around. As noted family consultant and my good friend Tom Rogerson of GenLeg Co. says, “A strong business cannot hold a family together, but a strong family can hold a business together!”

Rogerson uses the analogy of a railroad track to illustrate the multiple goals of family governance. The right rail represents the financial goals of a multigenerational family. The left rail represents the family’s relationship and culture goals. The crossties unite the two rails together where the family learns communication skills and builds trust in family decision making. Strong crossties are the ties that bind a family together through thick and thin. By having a structure and engaging in learning exercises, the family becomes more connected. It develops a healthy interdependence, so the support system is in place to be there for each other.

In future emails, we will continue exploring HOW to create this structure, but we’ll close with one cardinal rule. A successful governance structure is not established by some higher power and imposed on a family. Instead, to achieve “buy-in,” each family member needs to participate in the process and own it. To build an empowered family, each participant needs to feel some responsibility and authority over its governance system. As Tom Rogerson so eloquently sums it up, “Wealth without responsibility or authority is a formula for resentment and failed self-worth.” Involving the family in the activity of building and maintaining healthy family governance is one of the keys to raising responsible heirs.

Marvin E. Blum

A Conversation with Marvin Blum—“Last Chance” Tax Planning

June 22, 2021

In our Family Legacy Planning series, we are shifting gears this week to cover a matter of urgent importance. With new tax proposals pending in Congress, the tax landscape may soon drastically change. Now is the time to engage in “last chance” tax planning and get in front of the new legislation. You don’t want to wake up with regret on January 1, 2022, wishing you had acted before it was too late.

I recently joined Scott Bishop, CPA, CFP to discuss potential income and estate tax changes under the Biden administration for the Financial Planning Association’s Tax and Estate Planning Knowledge Circle. Click on the link below to hear my analysis, predictions, and planning tips.

Here are the topics discussed:

• What are the key developments since the November 3, 2020 election?
• What are the key proposals to raise taxes?
• What are the key provisions of each of these legislative proposals?
• What is likely to pass?
• Given all this uncertainty, what kind of planning are you seeing?
• What other tax law developments are being considered?

Topical outline available here.

Replay: A Conversation with Marvin Blum—“Last Chance” Tax Planning

Family Legacy Planning is a matter of both the heart and the head. Today’s emphasis on more on the “head” side of the ledger, dealing with the tax and financial aspects of holistic planning. Next week, we return our focus to the other side of the ledger, Family Governance Planning, in order to properly prepare your family for the financial inheritance heading their way.

Marvin E. Blum

Why Your Family Needs a Family Governance System

June 15, 2021

Throughout 2021, The Blum Firm has been sending weekly emails about our latest initiative, Family Legacy Planning. We’ve discussed the compelling statistic that 90% of families fall victim to “shirtsleeves to shirtsleeves in 3 generations.” We have stressed that the single most important action is to hold regular family meetings. Our emails provided suggested topics for family meetings, with particular emphasis on creating a Family Mission Statement. We also shined a spotlight on how to write a “Legacy Letter,” also known as an “Ethical Will.” Most recently, the focus has been on creating an in-house family education program to train heirs to be responsible inheritors. Today, we highlight another important aspect of Family Legacy Planning: creating a Family Governance System.

When we study the best practices of the “ten percenters,” those families who beat the shirtsleeves curse, we learn that they are intentional about creating a successful family. They don’t leave things to chance. As we’ve said before, they understand that “hope is not a strategy.” Over time, as a family grows and evolves, family dynamics becomes more complicated. This is especially true as in-laws join the family, and as siblings and cousins interact. Inevitably, conflicts will arise. Relationships will be strained. This happens in every family, even in the most harmonious ones. Successful families think ahead. They get in front of these stresses by adopting a formal Family Governance System that will guide them through the twists and turns that every family experiences.

In upcoming emails, we will dive deeper into the “how to’s” of family governance. As a hint of what’s coming, be ready to learn more about concepts such as:

• A family constitution and bylaws
• A family council
• Family committees
• An advisory board of the family’s “go to” outside advisors
• Determining which family members vote
• The procedure for making decisions
• The procedure for resolving conflicts
• The process for onboarding in-laws

Keeping a growing family operating smoothly and lovingly can be even more challenging than running a business. It’s well-accepted that a business needs a governance system. It’s even more critical to provide your family that kind of structure. As with everything else when it comes to families, there’s no “one size fits all” governance system. Each family decides what fits them best, but every family deserves some kind of governance system to help them swim through the uncharted waters of family life.

Marvin E. Blum

Create a “Red File” to Prepare Your Heirs for What’s Coming

June 8, 2021

In last week’s Family Legacy Planning email, the focus was on creating an in-house family education program to train your heirs. All too often, an inheritance lands in unprepared hands. Giving your heirs the gift of advance preparation improves the odds that they’ll know how to handle the inheritance when it comes their way. We wrote before of a football field where the quarterback hurls a pass to the other end of the field, where receivers are standing around without a clue what’s coming or what to do with the football when it arrives. The quarterback is Generation One, the football is the inheritance, and the receivers are clueless future generations. Unless you prepare your heirs, the odds are high they’ll fumble the football.

Part of preparing heirs is to also leave them a “Red File.” A Red File is a roadmap containing critical information to guide the family through a loved one’s incapacity, estate administration, business succession, and creation and continuation of a lasting legacy. The Red File covers the items missing from even the most carefully crafted legal documents. Your will and other estate documents don’t contain items like key contacts, passwords, caregiving wishes, and heartfelt reflections. The process of preparing heirs includes providing them this information so they won’t have to go fishing for it after you’re gone.

Many put off this task, assuming they have time to take care of it later. However, we all know that people in seemingly excellent health can die quickly and unexpectedly. For example, the leading cause of death in the United States is heart disease. For two-thirds of women and one-half of men who die from heart disease, their FIRST SYMPTOM WAS DEATH—not chest pain, not discomfort in an arm, and not shortness of breath. Make it a goal to create a Red File this summer.

Click on this link for The Blum Firm’s Red File checklist, containing the following four sections:

1. Centralized File of Personal Information: Passwords, contacts, listing of assets you own, location of assets and documents.
2. Plan for Incapacity: Who will provide care, will they be compensated, where will you live, favorite TV shows, movies, colors, foods (don’t make your caregiver guess).
3. Business Continuity Plan: Your will says who will own the business, but not who will manage it. Give your family management succession guidance to facilitate the transition for the day WHEN (not IF) you are gone.
4. Legacy Plan: A Red File is the ideal place to document the “heart” side of your estate plan. Provide information on ancestors, obstacles they overcame, meaningful memories, lessons learned, values, and goals for the family.

After preparing a Red File, be sure to update it periodically. Also, tell your loved ones where they can find it. It can be handwritten or electronic, but be sure they know the password so they can open it.

Marvin E. Blum

Create a Family Education Program to “Train Up” Your Heirs

June 1, 2021

In The Blum Firm’s research on Family Legacy Planning, we discovered (not surprisingly) that one of the greatest causes of family failure is unprepared heirs. To combat that problem, you have to be intentional. You can’t expect heirs to just automatically learn all they need to know to become responsible inheritors. We recommend that every family create an in-house education program tailored to your family’s specific situation.

Here are the steps to create a family education program:

1. First, assess where you are. Then decide what information you’d like your heirs to know. Every family has its own needs and its own vocabulary. This is not a “one size fits all” process. The difference between where you are and where you want to be defines a “gap” that you want to fill.

2. Meet everyone where they are, at their age and sophistication level. Design separate programs for different groups. Deliver the content in an age-appropriate way, spoon feeding it out as they’re ready to receive the doses of information. Don’t overload their brains with a “fire hose” blast of detail.

3. Use a variety of formats, such as reading materials, games, teleconferences, and outside speakers. Make it interactive and not a lecture. Find a balance between finance and fun.

4. The curriculum goes beyond finance. Be sure to include family history, values, lessons learned, philanthropy, wealth stewardship, as well as financial literacy, money management, estate planning basics, and legal duties.

5. Identify who will be responsible for implementing and monitoring the education program. Choices include a learning committee formed within the family, an outside advisor, or a family office employee.

6. Modify the program over time to continue meeting the family where they are. As family members grow and learn, the education content and methods will need to evolve.

The next big question is always: At what age do we start? Answer: It’s never too early. There are lessons that even very young kids can learn, if delivered the right way. In the Jewish tradition, as expressed in Ethics of the Fathers, we learn: “Train up a child in the way he should go, and even when he is old, he will not depart from it.” In the Blum family, we’re already starting with our grandchildren. Remarkably, I’m teaching them, but they’re also teaching me!

Marvin E. Blum

Here’s a F.A.S.T. Solution to Legacy Planning

May 25, 2021

In last week’s Family Legacy Planning email, we stressed the “last chance” opportunity to take advantage of the $11.7 million estate and gift tax exemption before it reduces by half or more—“use it or lose it.” Now is an ideal time to use that exemption to invest in your family. By funding a FAST (Family Advancement Sustainability Trust) now, you can help your family avoid falling victim to “shirtsleeves to shirtsleeves in 3 generations.” Statistics show that 90% of families fail. A FAST can improve the odds that your family will be one of the 10% who succeeds.

We have all witnessed the disaster when an inheritance passes into unprepared hands. Families who succeed engage in best practices like family meetings and family education, all aimed at preparing heirs to be responsible inheritors. In my experience, the biggest issue that keeps matriarchs and patriarchs awake at night is worrying about how their kids will handle all that life throws their way. A FAST equips your family to remain healthy and connected through the generations.

In a nutshell, the FAST does two things:
(1) It is funded with assets that will be used to pay for family enrichment and family education activities such as family retreats, family travel, and preserving the family’s heritage, as well as maintaining legacy real estate assets the family wants to pass down to future generations; and
(2) The FAST appoints trustees/committees who are paid to do the legwork in planning these activities and making sure they happen.
The end result is a gift to your family of a meaningful and lasting legacy.

Our experience is that when Generation 1 (“G-1”) hears of the best practices of successful families, it embraces these activities, pays for them, and will make sure they happen. G-1 has hopes and dreams that future generations will continue to engage in these best practices, but the reality is that after G-1 is gone, G-2 often drops the ball. G-2 may balk at paying for them, and G-2 often is too busy or preoccupied to do the legwork in planning them. The FAST is a practical tool to help the family continue the process of preparing heirs. It can be an add-on to an existing estate plan without disrupting the existing plan. With the current all-time high exemption, now is the ideal time to fund assets into the FAST.

Here’s another tip: You can substantially leverage your gift by using the funds in the FAST to purchase a life insurance policy on G-1. When G-1 is gone, the proceeds are paid into the FAST free of estate tax and generation skipping tax. With proper planning, you can endow your family’s success for many years to come and fund a legacy that will live on long after you are gone.

Marvin E. Blum

“Last Chance” Tax Planning & Family Legacy Planning—It’s Not “Either/Or.” It’s BOTH.

May 18, 2021

When The Blum Firm embarked on this Family Legacy Planning series several months ago, we described this new dimension of our practice as bringing both “head” and “heart” to the estate planning process. The key to holistic estate planning is to consider both “quantitative” and “qualitative” concepts and merge them into an estate plan. In the spirit of recognizing the marriage of these “soft” and “hard” issues, we want to focus on how to address family legacy planning during today’s hot legislative climate. We can’t ignore the fact that this family legacy conversation is happening during a time of potential tax law upheaval.

As we study the proposed tax changes in the American Families Plan and Senate bills known as the “For the 99.5% Act” and the “STEP Act,” we become aware of the urgent need to get out in front of these proposed changes. We read daily articles urging the wise to engage in “last chance” tax planning or else wake up with regret in January 2022. We need to pay attention to these warnings and take action, but do so thoughtfully, in a way that blends head and heart. Now is the chance to create a multi-generational estate plan to help set up future generations for success.

The estate and gift tax exemption is at an all-time high of $11.7 million, but legislation threatens to drop to the estate tax exemption to $3.5 million and the gift tax exemption to $1.0 million. It’s a “use it or lose it” situation. By using “squeeze & freeze” techniques that are currently available but now on the chopping block, you can remove far more than $11.7 million from your estate. For example, a married couple can transfer $36 million of assets to a Family Limited Partnership, where the discounted fair market value of the FLP units may be $23.4 million (after a 35% valuation discount). After gifting those FLP units to trusts, the couple can sell additional FLP units with a value of $150 million to grantor trusts and carry a note, shifting all the future appreciation on the assets out of the estate. Here’s the urgency: you can lock in the current exemption and grandfather the “squeeze & freeze” techniques used, as long as you complete your planning before the law passes.

Now may be the last chance to achieve this kind of wealth shift without having to pay income tax, estate tax, or gift tax. When you use creative tools like SLATs, DGTs, 678 Trusts (or BDITs), and GRATs, you not only get assets out of your estate, but you can carefully design the plan so you continue to have access to assets, control over investment decisions, and flexibility. That’s the “head” part. Now here comes the “heart” part. You can create a structure that includes future generations and begins training them to become responsible inheritors. You can build into the plan family governance procedures to teach heirs about philanthropy, entrepreneurship, family heritage, and values. After Generation 1 passes away, the assets continue in trusts designed with mentoring opportunities to continue educating and empowering future generations.

The ultimate merging of head and heart comes in the creation of a FAST (Family Advancement Sustainability Trust), a trust that endows the process of family meetings and covers the cost of preparing heirs. Now is the ideal time to use the $11.7 million exemption to fund a FAST. In next week’s email, we’ll dive deeper into the FAST solution to Family Legacy Planning.

Marvin E. Blum

A “Love Letter” to Your Family – Part 3

May 11, 2021

As part of our Family Legacy Planning series, this is the third email devoted to a topic that is stirring up lots of hearts—writing a “legacy letter” or “ethical will” to future generations.

It often helps to see samples of other legacy letters. There’s a wonderful collection of such letters in Ethical Wills: Words from the Jewish HEART by Dr. Eric L. Weiner. Thanks to my dear friend and family counselor, Dr. Carole Rogers, for gifting me this treasured book.

Here’s one of my favorites:

I plan to leave you with something of spiritual and material value that will help you become responsible and caring members of society. The world is yours to explore and in that exploring, you will come to understand and appreciate your place in the big picture of life. A loving heart, positive values, strong character, and a social conscience are far more important than material wealth.

What a meaningful gift to leave wisdom like that to future generations. For more samples, click here.

A final word: Don’t lock the legacy letter away. Make it a family tradition to read it each year at an annual family meeting. It will be great fuel for meaningful conversation and fostering a lasting family legacy.

Marvin E. Blum

A “Love Letter” to Your Family – Part 2

May 4, 2021

In last week’s Family Legacy Planning email, we encouraged everyone to write a “love letter” (also known as a “legacy letter” or “ethical will”) to future generations.

I use the word “write” intentionally. This is a time when I urge you to put the letter in your own handwriting, even with scratch outs and insertions. Imagine how powerful it would be for future generations to see their ancestor’s words in their own script, written straight from the heart.

There are workshops devoted to writing such ethical wills, but you can sit quietly anywhere and create your own. Let the words flow. Don’t overthink it.

Family legacy consultant Dennis Jaffe speaks of a letter by the matriarch of a wealthy family read each year to G-2 and G-3 at the annual family meeting. Listen to her words:

Greetings to all of you as you gather for the annual family meeting. I want you to think about a paradox—Money is important/Money is not important. There’s a lot of truth in both statements. You’ve come a long way, babies, but remember where you came from—know your roots. T. S. Eliot said, “Where is the life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?

You need knowledge, wisdom, and vision. It’s our job to be good stewards of the gifts Papa left us. There are pitfalls inherent in having a family business. Be vigilant for the warning signs. I would rather you dismantle the family business than squabble over it.

A legacy letter is your chance to make your estate plan personal. The wills cover important legal matters, but there’s more to an estate plan than legalese. Look for more samples in next week’s email.

Marvin E. Blum

A “Love Letter” to Your Family

April 27, 2021

As part of The Blum Firm’s Family Legacy Planning series, we are focusing on the gift to your family of not just your valuables, but also your values. One of the greatest gifts you can leave your family is a “love letter” addressed to future generations.

Such a letter also goes by the name “legacy letter” or “ethical will.” This letter is your chance to communicate things you want future generations to know. It can include what you value most in life, your best memories and favorite moments, your hopes and dreams for your descendants’ lives, and wisdom you want to share.

There is no set structure for a legacy letter. It can be addressed to your spouse, your children, the whole family, or a separate letter to each. You can include a dozen topics or just your definition of happiness.

Here’s a list of possible topics:

• Your goals and hopes for the future of the family.
• Your values and beliefs.
• Experiences that helped build your character and lessons learned.
• What you want to be remembered for.
• Traditions you want future generations to continue.
• Your family’s history and family stories.
• Important events in your life.
• Memories and happiest moments.
• Your definition of success or happiness.
• The family’s mission statement.
• Causes important to you.
• People who influenced you the most (your heros) and what you appreciate the most about them.

Next week, we’ll dive deeper into this topic and provide some samples. Our hope is that we inspire you to pull out pen and paper and start writing!

Marvin E. Blum

Here’s the Blum Family Mission Statement

April 20, 2021

In last week’s email in our Family Legacy Planning series, we introduced the topic of a Family Mission Statement, setting out a family’s guiding principles. Although all families are diverse, there are certain core values that unify the family. Identifying the family’s purpose ties the family more closely together. In today’s frenetic world, it centers us to know that we stand for something solid. The ideal mission statement is visionary, setting out a path for our heirs to follow. By making it a part of our regular family communication, the mission lives on long after we are gone to help future generations remain connected.

As mentioned last week, there are no rights or wrongs. It can be short or long, but I like to think of it like the “elevator speech” that everyone can remember and recite during a single elevator ride. We adhered to that principle in setting the Blum Family Mission Statement, which came in handy when a New York Times reporter asked our mission when interviewing me for an article entitled “Looking for Ways to Keep Money From Dividing a Family.” Here’s what I revealed about the Blum family’s three-fold mission: “We value relationships. We value productive work. We value meaning in our life, from spirituality or whatever else can offer you something in terms of meaning.” The reporter commented that it might sound “like a sentiment scribbled on a Hallmark card” but acknowledged that we take it seriously.

I recently read an article in The Atlantic by Harvard professor Arthur Brooks that contained a sentence that grabbed my attention, as it lined up right on the mark with the Blum mission. In his weekly series on “How to Build a Life,” Brook urges us to Dream the Possible Dream, closing with this wisdom:

Dream of the person you want to be—not of how rich or powerful or famous that future self is, but about the life you will lead and work you will do to serve and enrich others maximally, leaving behind a world that is better than you found it. Then, consider what it will take for you to get there, and the happiness you will gain from the joyful journey of creating value and loving others with abundance. Finally, focus your attention on what you will do this day in your work, spiritual life, and relationships that keeps you on that path.

There you have it—the three tenets of the Blum mission: relationships, productive work, and spirituality. It’s reaffirming to know we’re on the same wavelength with Professor Brooks.

Marvin E. Blum

What’s Your Family’s Mission Statement

April 13, 2021

In our series on Family Legacy Planning, The Blum Firm has been sharing ideas to discuss at family meetings. We recommend starting with visionary topics dealing with a family’s history, shared values, and the kind of family you want to be in years to come. The agenda then shifts to informational topics such as estate planning, business succession, and philanthropy. As learning comes together on both visionary and informational topics, the family has an enhanced understanding of who it is. Such a family is now prepared to tackle the next step: adopting a family mission statement.

The mission statement anchors a family. It sets out principles that are at the core of who the family is and what is important to it. The mission statement can go by different labels, but the purpose is the same. Whether it’s called a Family Values Statement, a Family Vision Statement, the Family’s Guiding Principles, or the Family’s Purpose, it guides the family on all major decisions. The mission should become part of the estate planning documents, guiding trustees when they exercise discretion or interpret the language of documents. All decisions should be consistent with the family’s mission statement.

The process of creating a mission statement is a unifying activity. All family members should offer input, as they will then feel a connection to it, achieving critical buy-in. A facilitator can aid the family in reaching consensus on a statement that reflects the essence of a family. The statement should be reviewed each year at an annual family meeting, and if necessary, may be periodically modified.

A mission statement can be short or long. There are no rights or wrongs. Here’s an example of one family’s mission statement: “We believe clear, constructive communication is at the core of our long-term success as a family. We encourage all efforts to further harmony, develop humor and perspective on life, and balance long-term concerns while enjoying the present; and to enhance communicative, caring and amicable relationships among family members.”

This is a family who understands that open communication is at the heart of family success. For five more examples of family mission statements, click here.

Be on the lookout for next week’s email where I’ll share the Blum family mission with you.

Marvin E. Blum

What if a Family Meeting Participant Is Disruptive?

April 6, 2021

It happens in every family—a family member “goes off” about something at a family meeting. Do not feel bad about it or feel your family is unique. This is part of normal family interaction. The key is to be prepared for it to happen and not let it throw off the process.

In our email series on Family Legacy Planning, we have stressed repeatedly the importance of having an experienced, objective third party serve as the facilitator at the family meeting. The patriarch and matriarch should be participants, just like everyone else. A neutral party can moderate the conversation, guide the process, synthesize comments, and shape consensus. Moreover, the family’s trained consultant can help restore calm when feelings are hurt or tempers flare.

Hot topics will invariably emerge. At the outset of the meeting, the facilitator can clarify that when (not if) such issues arise, everyone commits to remaining in the meeting and trusting the facilitator to handle it. Be prepared to deal with disruptions and assertions such as:

• sibling rivalry
• jealousy
• favoritism
• distrust
• exclusion
• feelings that something is “not fair”

(Side note: It’s a difficult concept for some to grasp that “fair” doesn’t necessarily mean “equal.”)

Those feelings are normal and are a part of almost every family’s dynamics. The facilitator can moderate the temperature by acknowledging such issues, but put them in the “parking lot” to address later. Alternatively, the facilitator can call for a break and have private conversations to hear out the views and cool things down.

Unfortunately, there are occasions when things become so hot that a disruptive member prevents the process from being successful. At times like that, you can’t have unanimous participation. It is better for the process to continue with the rest of the family than for the process to stop. The facilitator can communicate the hope to the absent family member that he or she can rejoin the process later.

At The Blum Firm, we have developed a network of consultants to facilitate family meetings. We welcome the opportunity to help you find the right fit for your family.

Marvin E. Blum

A Deeper Dive into the Family Meeting Agenda

March 30, 2021

In recent emails in our Family Legacy Planning series, we stressed the importance of ending each family meeting by setting the agenda for the next family meeting. We recommended that the agenda topics for the first family meeting be more visionary or lofty, aimed at identifying a family’s ethos and shared values. As the meetings proceed, the family is ready to tackle more informational topics. At the conclusion of each meeting, poll the group to find out what issues are top of mind. Ask questions like: “What are you thinking about these days? What subjects would you like to explore?” The facilitator can then help the family reach a consensus on the topics for discussion at the next meeting.

Consider these suggestions:

• Update on the family’s business operations
• Plans for management succession
• Overview of the estate plan
• Review of the family’s philanthropic history
• Patriarch’s presentation on mistakes made and lessons learned
• Introducing the family to its team of advisors

As to the last suggested topic, many younger generation members aren’t acquainted with the family’s advisors. Lacking an understanding of the role they play, there is a tendency to replace the advisory team when the older generation is gone. Doing so deprives the family of advice from a team with valuable historical perspective. The family meeting is an ideal environment for younger family members to get to know the family’s advisors and learn the importance of working with a team of trusted advisors.

Topics such as these not only help a family learn who it is, but it also opens up lines of communication. Family members get to know each other on a deeper level and begin to develop trust. Recall that a breakdown of communication and trust is responsible for 60% of family failures. Families who become more inter-connected provide each other with meaningful support, especially during stressful times. Those families are better equipped to beat the odds of “Shirtsleeves to shirtsleeves in three generations.”

ONE FINAL TIP: I want to share a recommendation from a very wise client (and longtime friend of mine) who is a veteran of the family meeting process. (Thanks, Bryan.) On the day following a presentation by the family’s advisors, the family regroups on a follow-up call. Each shares what they heard and learned. Often a family member who was reluctant to ask questions in front of advisors is more willing to open up in a family-only debrief. Such a follow-up meeting insures that everyone heard the same thing and provides a chance to clear up any ambiguities. Now the family is moving into an important realm of lifelong family education: becoming skilled at teaching each other and learning from each other.

Marvin E. Blum

Warren Buffett’s Advice to Avoid Raising Entitled Kids

March 16, 2021

In The Blum Firm’s email series on Family Legacy Planning, last week’s email raised a question that stirred up a lot of interest. The focus of the email was suggested topics for discussion at the first family meeting. Our recommendation is to start the process with visionary, or “heart,” topics such as “What does it mean to be a member of this family? What do we stand for? Who are we as a family and what are the benefits of being part of this family?” Coming together to explore questions like these helps a family discover its ethos. This discovery helps unify the family around the family’s shared values. Following that opening discussion, future meetings can shift to more informational topics.

But before we shift from visionary topics to more concrete ones, let’s dive deeper into one of last week’s questions that generated curiosity: “How do we avoid raising entitled kids?” We at The Blum Firm have discovered that this question is one that keeps many of our clients awake at night. They worry about money ruining their kids. They often ask: How much is the right amount to give my kids? Here’s my favorite answer: The right amount to give your kids is the amount they are prepared to receive. The problem is less about the amount the kids receive, and more about the kids not being prepared to receive it. We have to be intentional about training our kids to be responsible inheritors. Preparing heirs is a big part of the family meeting process.

This question brings to mind an important Q & A I was privileged to have with Warren Buffett. At a Berkshire Hathaway annual meeting a few years ago, I was selected to ask the “Oracle of Omaha” a question. I decided to ask about his estate plan. I recalled his famous statement that he wanted to leave his kids “enough so they could do anything, but not so much that they could do nothing.” I asked him to share with us how much that is. In his thoughtful answer, Mr. Buffett went further. His advice sheds a lot of light on the challenge of raising kids so they don’t become entitled.

For a summary of my Q & A with Warren Buffett, click this link to read an article in The Globe and Mail (Canada’s version of the Wall Street Journal). The first sentence of Buffett’s answer to my question is powerful: “I think more of our kids are ruined by the behavior of their parents than by the amount of the inheritance.” In a nutshell, Buffett warns that our kids are watching us more than they are listening to us. There’s a lot to do in order for us to raise responsible kids, but it all starts by setting a good example.

Marvin E. Blum

Bring a Crystal Ball to Your First Family Meeting

March 9, 2021

Now that The Blum Firm has added Family Legacy Planning to our offerings, we are often asked: “How do we get started?” After an initial assessment so we know the family’s starting point, the first big step is to plan a family meeting. We recently provided some “do’s” and “don’ts” for the first meeting’s agenda. In particular, we suggested to start by focusing on values, rather than valuables. Asking everyone to tell their favorite family traditions, stories, and memories offers a non-threatening way to kick off the discussion. Then “look into a crystal ball” and encourage the family to dream big. Start with visionary questions, such as “What you want the family to look like in 25 years?” Then create a plan to help get from the family you are now to the family you want to become.

Here are some additional visionary topics to consider. Feel free to pick and choose the ones that best suit your family’s situation.

• What is the purpose of our family?
• What is the purpose of the family’s wealth?
• How does wealth impact your life (both good and bad)?
• What do you want for your life?
• What do you want collectively for the family as a whole?
• How do we avoid raising entitled kids?

The advantages of starting with lofty topics is that it levels the playing field. Everyone’s view is valid, regardless of age or level of sophistication. There are no rights or wrongs. Every voice counts and needs to be heard. It opens the door for more free-flowing communication, rather than a technical topic where the presenter may appear to be talking down or lecturing to some in the room. The goal is for everyone to participate and feel respected.

At the end of the first meeting, engage in brainstorming to select topics for upcoming family meetings. After the visionary topics, the agenda shifts to more informational items, such as the family’s business, estate plan, finances, and philanthropy. Getting input on future agenda topics from G-2 and G-3 is not only insightful, but it creates important buy-in. Be on the lookout for upcoming emails that will dive deeper into suggested agenda topics for future meetings.

A FINAL TIP: At the end of each meeting, schedule the next family meeting. By always setting the next date, place, and agenda, the family meeting process will drive itself. Staying a step ahead assures the process continues, as a family meeting is not a “one and done” event.

Marvin E. Blum

Do You Love Your Pets?

March 2, 2021

As part of The Blum Firm’s series on Family Legacy Planning, today we’re addressing another important part of family planning—pets. The pet owners I know consider their pets to part of the family, even closer family than many of their relatives. If you’re like 2 out of 3 American homes, you have a pet. Just as with other precious assets, pet owners need to consider what happens when they are no longer able to care for their pet. Most assume their family will step in, yet more than 500,000 pets are euthanized each year because there was no plan for their care.

Every state now has laws authorizing a “Pet Trust.” Consider adding a Pet Trust to your estate plan, naming a trustee to be in charge of carrying out your wishes. The trust should be funded with sufficient assets to provide for the annual cost of pet care times your pet’s life expectancy, plus an extra sum for unexpected needs, transportation, and the final disposition of your pet. The Pet Trust ensures that the money you designate is actually used for pet care.

In case you become unable to care for your pet while you are alive, consider adding provisions to your Power of Attorney to (1) allow your agent to give your pet to the new caregiver, and (2) authorize your agent to create and fund a Pet Trust if you become unable to do so.

The Blum Firm is committed to holistic estate planning that addresses both financial needs and matters of the “heart.” We would be honored to help you provide for all your loved ones, including the furry ones.

Marvin E. Blum

Don’t Let a Funeral Director Plan Your Next Family Gathering

February 23, 2021

As part of The Blum Firm’s new initiative on Family Legacy Planning, we have been stressing that the single most important step to family success is to plan regular family meetings. All too often, family gatherings occur only at holidays or are (heaven forbid) randomly dictated by a loved one’s passing. Family meetings should be intentional and planned, providing an opportunity for both meaningful content and fun interaction.

As last week’s email emphasized, the first rule is “Don’t Go It Alone.” We can help you select the right advisor to facilitate the meeting. The next steps are to determine who attends, when, and where. Pre-meeting interviews between the facilitator and each attendee will identify key topics for discussion. The family may also fill out an assessment form to further reveal issues needing the most attention. The next step is to set the agenda for the first meeting.

Here are some suggested “do’s” and “don’ts” for a first meeting:

1. Don’t lead with the money. Many assume the first order of business is to review the family’s financial picture, entity structure, and estate planning documents. Although those are important topics, push them off to a later meeting.
2. Start with a focus on the family’s values, not its valuables. Engage in an exercise to identify each family member’s key values, and then find the overlaps. By identifying common values, the meeting starts on a positive note. We want to begin with commonalities, and when “hot” issues or disagreements arise, put them in the parking lot to address later. The first meeting is better used to identify values the family treasures, which will be useful later in crafting a family mission statement.
3. Another early activity is to engage in an exercise to identify each family member’s communication style. Knowing each one’s way of interacting, and even the way each one expresses love, will help as we work on opening communication channels and building trust. Recall that the single greatest cause for family failure isn’t inadequate planning; it’s lack of communication and trust.
4. Tell family stories, especially stories of resilience and times ancestors overcame obstacles. When (not if) adversity strikes, knowing that you descend from survivors builds confidence that you also have what it takes to survive.
5. Address visionary topics, such as each person’s ideal vision for the family’s future. Ask each to look into a crystal ball and envision what you want the family to look like in 25 years. What steps can we take now to improve the chances of looking like that family?

As we continue with this email series, be on the lookout for a deeper dive into suggested topics for family meetings. There are no right or wrong approaches. Let us help guide you to select the best topics for to kick off your first family meeting.

Marvin E. Blum

The First Five Steps to Plan a Family Meeting

February 16, 2021

Question: What percentage of families face communication challenges, or have issues they have swept under the rug, or have heirs who are not fully prepared to inherit?
Answer: 100%

When the patriarch and matriarch are gone, those issues cause many families to unravel. The solution is to face the issues head-on. The way to do that is by holding regular family meetings where the generations come together to connect and learn. Having a strong, interconnected family provides individuals with critical support to confront life’s challenges, recover from obstacles, and thrive.

The hardest step is to plan the first family meeting. People just don’t know how to get started. Fortunately, there are advisors who are trained to guide you through the process. Don’t try to go it alone. At The Blum Firm, we have resources to help you identify the advisor who will be the right fit for your family. For optimum results, the patriarch and matriarch need to be participants at the meeting and not lead it. Leading the meeting, moderating the conversation, objectively (and delicately) addressing the “hot issues”—that’s the job for a trained facilitator.

So here’s the way to get started:

• Step 1: Select an advisor to guide the family meeting process.
• Step 2: Identify the family members who need to attend the meeting.
• Step 3: Decide on a mutually convenient time.
• Step 4: Choose the location. Note: COVID has taught us that we can even do the meeting virtually, by zoom (“Brady Bunch” style), making scheduling a lot easier.
• Step 5: The facilitator conducts a pre-meeting interview with each participant to set expectations and identify hot button issues.

In our next email, we’ll dive into Step Six—creating the agenda for the first meeting. Hint: The first topic won’t be to discuss money. Stay tuned!

Marvin E. Blum

The First Step is the Hardest: Family Legacy Planning

February 9, 2021

In our last email about the Family Legacy Planning work we’re doing at The Blum Firm, we pointed out the sobering statistic that 90% of families fail. The main two causes of failure are (1) lack of communication and trust, and (2) unprepared heirs. Only 10% manage to escape the adage “shirtsleeves to shirtsleeves in three generations.” By looking to the successful 10%, what steps can we take to improve the odds our family will be in the 10% column?

After much research, we have determined that the first and foremost contributor to success is to hold regular family meetings. Families need to be intentional about meeting in order to build a healthy connection with each other. Those are the families that build communication and trust. Those meetings also provide a setting to prepare heirs to become responsible inheritors.

I have been preaching this gospel for years, going back to a workshop I co-facilitated years ago in New York. The New York Times covered my work in an article “Looking for Ways to Keep Money From Dividing a Family.” (Link here.) Allow me to share a heartwarming story about that article that just came to my attention.

A prominent executive in Memphis, Tennessee recently died, and a group was going through his possessions. One of them came across that article, now more than six years old, which he had saved among his important papers. On it, he’d written the notation “Family Mtg,” double underlined with a star. It turns out the article inspired him to hold a family meeting. I didn’t know the gentleman, but one of his team members tracked me down to tell me I’d made a difference in the lives of this family. Learning that I made an impact on people I never met inspires me to keep preaching the gospel of conducting regular family meetings. It’s why Family Legacy Planning is an important part of the holistic estate planning we do at The Blum Firm.

We recognize that the hardest step is to plan the first family meeting. In the next email, we’ll focus on some tips to help you plan that first meeting, but here’s the first one: Don’t go it alone. Engage a trusted team of advisors to facilitate the meeting. The Blum Firm would be honored to help guide you through the family legacy process.

Marvin E. Blum

Do I Need To Do Family Legacy Planning?

February 2, 2021

In reading The Blum Firm’s email series about our newest initiative, it may lead you to ask yourself: Do I need to do Family Legacy Planning? The answer often follows from honestly asking yourself these two questions:

• “Are my heirs truly prepared to inherit?”
• “Are there issues in my family that if not addressed could lead to a breakdown in communication and trust?”

Consider these daunting statistics:

• 90% of families dissipate their wealth within two generations after inheriting it, falling victim to the proverb “shirtsleeves to shirtsleeves in three generations.”
• Research reveals the causes for this failure: 60% is due to lack of communication and trust, and 25% is due to unprepared heirs.

If your answer is “Yes, I need to do Family Legacy Planning,” the next question is usually: “How do I get started?”

In the next email in this series, we will begin unpacking the process. The first step is to find the right advisor and plan a family meeting.

Be on the lookout for more to come on how to be one of the successful 10%.

Marvin E. Blum

The Super Bowl of Estate Planning: Family Legacy Planning

January 26, 2021

We recently introduced the topic of Family Legacy Planning, an offering The Blum Firm provides as part of the estate planning process. The aim is to help families succeed. With the Super Bowl coming up, let’s put this into football terms.

Noted family governance consultant James Grubman uses the analogy of a football game to illustrate what happens if you fail to prepare your heirs. At a football game, the focus is on the quarterback. The quarterback has perfect throwing skills. He hurls a pass from one end of the field to the opposite end. The football (the inheritance) is coming at the receivers, but no one has told them it’s coming, prepared them for how to catch it, or taught them what to do with it if they catch it. They’ve never been to a practice. They’ve never been taught the rules. They don’t even know how to coordinate with each other as team players. What are the odds that the receivers will catch the football and run the length of the field, without fumbling it, to score a touchdown? A family with unprepared and disconnected heirs almost always “drops the ball.”

Just as in a football game, you need to tackle these issues head on. You can’t wish them away and hope your heirs will figure it out. Hope is not a strategy. Let us at The Blum Firm help your family adopt a strategy to win the game.

Marvin E. Blum

What is “Family Legacy Planning?”

January 19, 2021

Last week, we announced that The Blum Firm is launching a new initiative: Family Legacy Planning. That announcement generated a lot of interest, as well as the question: Why?

After 42 years as an estate planning attorney, I have witnessed many heartbreaking situations where an inheritance tore a family apart. Over the last decade, I have been studying successful families and asking:

• “What are the best practices of successful families that my clients should be doing?
• “As a lawyer, how can I help my clients implement these best practices?

This research is what led us to add Family Legacy Planning as an offering for our clients.

In a nutshell, just what is Family Legacy Planning? Traditional estate planning addresses the family’s valuables—where, when, and how they pass to future generations. Family Legacy Planning addresses the family’s values. Its mission is to pass down more than wealth, but also a family’s ethos, improving the odds the family will remain meaningfully connected for generations to come. Its aim is to pass down the skills and tools to help heirs face life’s inevitable challenges and not only survive as a family, but thrive.

The COVID pandemic is a natural time of reflection. It has made all of us aware of family issues we’ve been sweeping under the rug. These issues don’t go away. In fact, they tend to erupt when a senior generation member dies. Addressing them is hard, but it’s an act of love. Now is the ideal time to start.

Over the coming weeks, be on the lookout for regular emails as we explore the steps you can take to help your family succeed. The Blum Firm is proud to partner with you on this critically important endeavor.

Marvin E. Blum

When The Blum Firm reached our 40th anniversary three months ago, I announced the milestone by reflecting on how our estate planning law firm has grown and evolved over the years. In that announcement, I shared that we would be launching a new initiative in early 2021. I’m excited to celebrate that new offering with you now: Family Legacy Planning.The aim of this new endeavor is to partner with you to create a process and structure to help your family succeed from generation to generation. It takes more than hopes and dreams for future generations to thrive. Hope is not a strategy. We need to be intentional.

Family Legacy Planning has started to emerge as a critical part of the estate planner’s toolbox. It was born out of asking clients: “What keeps you awake at night?” We learned how much our clients worry about their family’s future. We have all observed horror stories of inheritances that failed.

Labels began to surface to try to put a moniker on this new aspect of planning: Family Governance; Holistic Estate Planning; Family Dynamics; “Heart” vs. “Head” estate planning; Qualitative vs. Quantitative estate planning; the “Soft” issues of estate planning (although, ironically, these issues are typically “hard” to address). We believe the term “Family Legacy Planning” encompasses all these concepts.

Coming out of 2020, now seems an ideal time to focus on the family. The pandemic heightened our awareness of our need for family, as well as the fragility of this precious asset. On a personal note for Laurie and me, mixed in with the hard times came the gift of two new grandsons, born only a few weeks apart. There’s nothing like having grandkids to make you even more acutely aware of the importance of both the “head” and the “heart” aspects of estate planning. A family’s financial success, important as it is, is only part of the story. We want to create a meaningful legacy and pass it down to our heirs. As we say in Hebrew, L’dor Vador, from generation to generation.

In the coming weeks, be on the lookout for regular emails from us explaining the features of Family Legacy Planning. We urge you to make it a New Year’s Resolution to focus on your family this year and learn the steps you can take to help set up your family for success.

Marvin E. Blum